Fresno, Calif.-based Community Health System and its affiliate Physician Network Advantage have agreed to pay $31.5 million to settle allegations they violated the False Claims Act and Stark law by providing benefits to physicians in exchange for patient referrals, according to a May 14 news release from the Justice Department.
What happened?
- Physician Network Advantage, a healthcare technology company formed by CHS, was intended to support Fresno-area physicians’ adoption of the system’s electronic health record platform.
- Federal officials allege CHS offered both financial and non-financial incentives to encourage referrals to its facilities, including Community Regional Medical Center and Clovis Community Medical Center.
- At PNA’s custom-built lounge, referring physicians were offered perks such as expensive wine, liquor, cigars and meals. CHS also allegedly provided subsidies for EHR technology and office equipment to private physicians as further inducements for referring government-insured patients.
- Additionally, physicians were allegedly given bonuses disguised as payments for “clinical integration activities,” when in fact the payments were intended to reward referrals.
- As part of the settlement, CHS entered into a five-year Corporate Integrity Agreement with the HHS Office of Inspector General.
- The settlement resolves allegations without a determination of liability.
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