Tri-City Medical Center, a hospital in Oceanside, has agreed to pay nearly $3.3 million in fines to resolve allegations that it violated the Stark Law and False Claims Act.
The Stark Law forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital (unless that relationship falls within certain exceptions). Arrangements with physicians who are not hospital employees must be set out in writing and satisfy a number of other requirements, according to the U.S. Attorney’s Office.
The allegations against the hospital include 97 financial arrangements with physicians and physician groups that did not comply with the Stark Law, most of which due to expired written agreements, missing signatures or missing documents.
“Patient referrals should be based on a physician’s medical judgment and a patient’s medical needs, not on a physician’s financial interests or a hospital’s business goals,” said U. S. Attorney Laura E. Duffy of the Southern District of California, in a statement. “This settlement reinforces that hospitals will face consequences when they enter into financial arrangements with physicians that do not comply with the law.”
The medical staff contracting violations occurred in 2009 and Tri-City Medical Center voluntarily reported them in 2011, according to a statement issued from the hospital.
“It is unfortunate to have inherited this long-standing legal issue, but we are pleased to have brought it to a successful conclusion,” explained CEO Tim Moran. He further stated, “This is a clear indication that we must all strictly adhere to the guidelines set forth by all health care governing agencies.”