Adventist Health System has agreed to pay $14.1 million to settle allegations that it illegally compensated physicians who referred patients insured by Medicare and Medicaid to White Memorial Medical Center in Boyle Heights, the Department of Justice announced today.
The whistleblower lawsuit, filed by two doctors in 2008 in a Sacramento federal court, alleged that Adventist Health – owner of the 100 year-old White Memorial Medical Center – violated the Anti-Kickback Act and Stark Statute, which limit monetary arrangements hospitals can have with referring physicians, and the state and federal False Claims Act.
White Memorial spokeswoman Alicia Gonzalez said the settlement agreement avoids a lengthy litigation period “which would have taken our focus away from serving the community.”
She said the settlement “resolves civil false claims allegations relating to financial relationships between WMMC and several doctors that were entered into more than a decade ago,” adding that White Memorial has “cooperated fully with the investigation.”
The government investigated the allegations and then joined the case along with the state in April.
According to the settlement, Adventist Health will pay about $11.5 million to the government, most of which will benefit the Medicare Trust Fund.
The remaining $2.6 million will be paid to the state Department of Health Care Services.
White Memorial has also entered into a five-year Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure its continued compliance with federal health care benefit program requirements, according to the DOJ.
“Adventist created financial relationships with physicians groups that were an important source for patient referrals,” said plaintiffs’ lawyer Eric R. Havian. “But those types of financial relationships can be unhealthy for patients.”
The case was filed in Sacramento instead of Los Angeles for “strategic reasons,” Havian said.
For 100 years White Memorial has been “committed to delivering high quality care to our patients and keeping our communities healthy,” Gonzalez told EGP.
White Memorial is “pleased the matter is concluded and we will diligently fulfill the terms of the corporate integrity agreement,” she said.