Posted by: adventlife | March 5, 2014

Adventist Health West Must Pay a $14.1 Million Penalty

Adventist Health System 2

After five years of litigation which could have resulted in a maximum penalty of $100 million dollars, the Adventist Health System West decided to pay a much smaller settlement penalty amounting to $14.1 million dollars to the government and the whistleblowers. What follows is a number of comments I selected from several public media reports:

“Adventist Health System/West and its affiliated hospital White Memorial Medical Center in Los Angeles will pay the government $14.1 million to resolve claims that they violated the False Claims Act. This was a whistleblower ( qui tam ) suit, and the two doctors who originally filed it will get $2,839,219.”

“The rest of the settlement will go to the U.S. Government ($11.5 million) and the California Department of Health Care Services ($2.6 million).”

“While Adventist does not need to admit fault in the settlement, the allegation in the suit was that it hospital, White Memorial, selling them medical and non-medical supplies and inventory at a discount that was less than fair market value and also paid the physicians more than fair market value to teach at the hospital’s family practice residency program.”

More: http://www.imagingbiz.com/topics/business/adventist-health-settles-false-claim-suit-141-million

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The legal and moral reasons for the penalty imposed on the Adventist Health System are quite explicit as evident from the following report:

“Doctors must make treatment decisions based on the best interests of their patients rather than on personal financial interests, which is why hospitals can’t pay doctors for patient referrals,” said Claire M. Sylvia, a whistleblower lawyer with Phillips & Cohen in San Francisco. “The government found out about what Adventist was doing only because two doctors challenged the system by filing a whistleblower lawsuit.”

“The whistleblowers alleged that Adventist Health violated the Stark Law and the Anti-Kickback Statute. The Stark Law states that hospitals may not seek reimbursement for claims based on referrals from physicians with whom they have a financial relationship. The Anti-Kickback Statute prohibits payment in exchange for referring, recommending or arranging for the purchase of any item or service paid for under a federal health care program such as Medicare or Medicaid. The complaint also alleged violations of the California Business and Professions Code and the California Welfare and Institutions Code, which prohibit compensation for patient referrals. Violations of these federal and state laws result in the submission of false claims for payment to Medicare and California’s Medi-Cal program, which violates the federal False Claims Act and the California False Claims Act.”

More: http://www.marketwatch.com/story/adventist-health-pays-141-million-to-settle-whistleblower-lawsuit-alleging-self-referral-and-kickback-violations-by-la-hospital-2013-05-03

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This was confirmed by a recent Los Angles Times report:

“Kickbacks and other unlawful financial arrangements cost taxpayer dollars and undermine the integrity of medical judgments,” said Stuart Delery, acting assistant attorney general for the Justice Department’s civil division.”

“White Memorial is part of Adventist Health in Roseville, Calif., which runs 19 hospitals and more than 150 clinics in California, Oregon, Hawaii and Washington. The 353-bed nonprofit hospital near downtown Los Angeles was founded by the Seventh-day Adventist Church in 1913.”

More: http://articles.latimes.com/2013/may/04/business/la-fi-white-memorial-settle-20130504

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As a member of the Adventist Church, I feel my share of shame to learn that a highly respectable organization created and sponsored by the church did allegedly engage in illegal practices for financial gain to the detriment of patients and taxpayers. We need to stay above even the apparent suspicion of moral turbidity.

“Stark Law prohibits a physician from referring Medicare patients for certain health services to any business or entity with which the doctor has a financial relationship.”

““The settlement announced today underscores one of the key purposes of the Stark and Anti-Kickback laws – to ensure that the judgment exercised by healthcare providers is based on legitimate patient needs and is not influenced by illegal payments,” said Benjamin B. Wagner, U.S. Attorney for the Eastern District of California. …”

More: http://bergermontague.com/blog/index.php/adventist-health-system-settles-false-claims-act-lawsuit-for-14-1-million/

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