Tulare Healthcare Settles Fraud Case for $2.4 Million

Ben Amirault, for HealthLeaders Media , August 6, 2009

Tulare Healthcare, which includes Tulare Local Healthcare District, Tulare District Healthcare System, and Tulare District Hospital, agreed to pay the government $2.4 million to settle allegations that the company violated the False Claims Act, anti-kickback statute, and the Stark Law, according to a Department of Justice release.

The case was filed last year by former Tulare Healthcare Chief Financial Officer Maria Lucy Reimche. Reimche alleged that Tulare Healthcare, based in Tulare, CA, was involved in illegal financial arrangements with physicians that referred patients to the facilities.

She alleged Tulare forgave physician debt, and allowed physicians to purchase and rent real estate priced below fair market value. The conduct allegedly went on from 2001 to 2007 and was designed to be remuneration to physicians who referred Medicare patients to Tulare Healthcare.

Such arrangements violate the federal anti-kickback statute, which prohibits anyone from offering, paying, soliciting, or receiving anything of value to generate referrals for items or services payable by any federal healthcare program. The agreements also reportedly violated the Stark law, which prohibits physicians from referring patients for specified services to a hospital or other entity with which the physician or an immediate family member has a financial relationship. Any services performed by the physicians with illegal relationships are considered false claims.

Ben Amirault is an Editorial Assistant for the revenue cycle division of HCPro. He manages the Compliance Monitor e-newsletter and has developed a number of online learning modules. He can be reached at bamirault@hcpro.com..

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