St. Vincent Healthcare, a hospital located in Billings, Mont., and Holy Rosary Healthcare, a hospital located in Miles City, Mont., have agreed to pay $3.95 million plus interest to resolve allegations that they violated the Stark Law and the False Claims Act by improperly providing incentive pay to physicians that made referrals to the hospitals, the Justice Department announced today.
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. A prohibited financial relationship includes a hospital’s agreement to compensate a physician in a manner that takes into account the volume of the physician’s referrals or the revenue realized through those referrals.
The settlement announced today resolves allegations that the hospitals paid several physicians incentive compensation that took into account the value or volume of their referrals by improperly including certain designated health services in the formula for calculating physician incentive compensation. These issues were disclosed by the hospitals to the government.
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