Memorial To Pay $1,278,579 After Federal Probe Of Financial Arrangement With Doctors; Memorial Says It Found Problem And Quickly Corrected It

Thursday, August 23, 2012

U.S. Attorney Bill Killian announced Thursday that his office has reached a settlement with Memorial Health Care System, Inc.  and Memorial Hixson Hospital (formerly known as Memorial North Park Hospital) in which Memorial agrees to pay $1,278,579 to settle alleged violations of the federal False Claims Act and other federal laws and regulations.

Memorial officials said the hospital found problems with leases with certain doctors in 2009, self-reported the problems, and corrected them. 

        The settlement agreement alleges that, beginning as early as January 2003, Memorial entered into a series of financial arrangements with certain physicians and physician groups through which it provided financial benefits intended to induce physicians to refer patients to Memorial facilities.  These arrangements violated federal laws known as the Ethics in Patients Referrals Act (or the “Stark law”) and the Anti-Kickback Statute and resulted in the submission of false claims to the Medicare system, U.S. Attorney Killian said.

He said these laws "are intended to protect patients by ensuring that physicians make patient referral decisions based on the patients’ best interests without being influenced by payments or financial benefits received from hospitals competing for their business. In addition, these laws are designed to protect the integrity of government-funded health care benefit programs.  Federal law prohibits hospitals from submitting claims to government-funded health care benefit programs such as Medicare for inpatient and outpatient hospital services referred, ordered, or arranged for by physicians who have prohibited financial arrangements with those hospitals.

        “Health care fraud and abuse has been and continues to be a major point of emphasis for the Justice Department and this Office. We will continue to enforce the Ethics in PatientReferrals Act and to protect the Medicare trust fund.”

        U.S. Attorney Killian noted that this settlement resulted from a comprehensive investigation that began in early 2009 and was a joint effort of the U.S. Attorney’s Office for the Eastern District of Tennessee, the U.S. Department of Justice; and the Department of Health and Human Services - Office of Inspector General (HHS-OIG). 

After the investigation began, but before being specifically notified of it, Memorial contacted government officials to report that it had discovered potential Stark law and anti-kickback statute violations.  Soon afterward, Memorial learned of and began cooperating with the government’s investigation.  Memorial has denied any intentional wrongdoing in agreeing to the settlement.  The investigation did not involve or reveal patient quality of care concerns, it was stated.

"This is an excellent example of how a health care provider can self-report billing concerns to the Government and avoid costly false claims litigation," said Derrick L. Jackson, Special Agent in Charge at the HHS-OIG in Atlanta.  “The OIG welcomes the opportunity to work with providers to resolve issues such as this and return money back to the Medicare Trust Fund."

        U.S. Attorney Killian commended the cooperative efforts of all who played a role in this complex investigation, and in particular lead HHS-OIG Special Agent Bob Turner and AUSAs Rob McConkey and Betsy Tonkin. He also expressed appreciation for the assistance of DOJ Senior Counsel Laurie Oberembt and HHS-OIG Senior Counsel Katie Fink. 

 Memorial issued this statement:

Memorial HealthCare System (Memorial) has signed a settlement agreement with the federal government, which resolves issues Memorial had previously self-disclosed involving certain leases with several physicians and physician groups who practiced at Memorial.

As part of its routine review of leases and contracts, Memorial discovered that prior to 2009 it had lease arrangements with physicians and physician groups that may have been out of compliance with the federal Stark law.  Memorial officials self-reported their findings to the federal government in December 2009 and at the same time corrected the lease arrangements.

Memorial reached the agreement without admitting liability in order to avoid the expense and uncertainty of litigation.  Additionally, Memorial does not believe that its lease arrangements were intended to induce physicians or physician members of groups to refer patients to Memorial facilities, which would be a violation of the anti-kickback statute.

As part of the settlement agreement, Memorial will pay the federal government $1.28 million.

James M. Hobson, Memorial president and CEO, said, “Upon evaluating the lease arrangements in 2009 as part of our compliance program, we determined that they did not reflect the true market value of office space leased to physicians or physician groups as the law requires.  We immediately self-reported our discovery to the U.S. Attorney for the Eastern District of Tennessee and brought the leases into compliance.

“Our mission is to serve our community with integrity, compassion, and excellence.  We found a problem, we quickly self-disclosed it to the appropriate authorities, we corrected the situation and we cooperated fully with the subsequent U.S. Attorney’s inquiry.  We will continue our practice of regularly evaluating and monitoring all our business practices to ensure legal and regulatory compliance.”


Latest Hamilton County Jail Booking Report

Here is the latest jail booking report from Hamilton County: BANTHER, WILLIAM DEWAYNE  HOMELESS CHATTANOOGA, 37405  Age at Arrest: 59 years old Arresting Agency: Hamilton County PROBATION VIOLATION (EVADING ARREST) --- BOHANNON, HENRY CHRISTOPHER  1915 SANDER DRIVE CLEVELAND, 37323  Age at Arrest: 27 years old Arresting Agency: Hamilton County ... (click for more)

Bradley County Detectives Seek Information On Man Caught On Surveillance Video

Detectives are asking for the public’s assistance in identifying a man captured on surveillance footage. On March 25, patrol deputies responded to AirSystems Unlimited, which is a local business located at 5668 South Lee Highway, in reference to a vehicle burglary. It was discovered a cell phone and car battery were taken out of a company vehicle which was in the parking lot. ... (click for more)

Slaxxon Regret - And Response

Back in the seventies my three oldest brothers had a buddy named Steve Slack. “Slack” was a star soccer player at Baylor and he grew up on Lookout Mountain, which is where I grew up. He and Jimmy, Henry and Bill went to the University of Virginia where they were roommates in an old, beat up house that was painted pink. Naturally, the place became known as the “Pink Palace” but lest ... (click for more)

Roy Exum: Oh Yes, I Loved West

One of my most beloved friends died early Saturday morning at the age of 67. Then again, West Oehmig’s only brother – King – died a couple of years ago at 63 so it wasn’t by happenstance I remembered Abraham Lincoln’s famous line: “In the end, it’s not the years in your life that count, it’s the life in your years.” Here are two brothers who lived larger than any other pair I can ... (click for more)

Central's Parrott Throttles Ooltewah With 1-Hit Shutout

Ooltewah looked like it was still on spring break. Central was sharp, Brooke Parrott dazzling, Mikayla Gill swung the bat well and the Lady Pounders played like an unbeaten, once-tied ballclub. Parrott threw a one-hit shutout – the hit was a wind-blown pop on the infield – and Gill slapped a two-run double off Kayla Boseman to right-center field in the third inning and ... (click for more)

Notre Dame Thumps Bledsoe Co., 11-1

The Notre Dame baseball team was in a race of a different kind Monday evening and the Fighting Irish came out on top in all three categories. Facing the Bledsoe County Warriors at Notre Dame’s Hunter Field, the Irish beat the rain, they got finished before dark and most importantly, beat the Warriors 11-1 in five innings as they improved to 4-2 overall with the same record in ... (click for more)