OK Health System Pays $13.2M to Settle Self-disclosed Kickback Violations

John Commins, for HealthLeaders Media , December 23, 2009

St. John Health System in Tulsa, OK, will pay the federal government more than $13.2 million to settle self-disclosed allegations that it reportedly billed Medicare and Medicaid for services that were tainted by the health system's incentive payments for referring physicians.

In April 2008, St. John conducted a voluntary internal audit and then submitted a self-disclosure report to HHS' Office of Inspector General raising concerns that agreements with 23 physicians and physicians' groups may have run afoul of the Stark Law prohibiting kickbacks, the False Claims Act, and other federal statutes.

"St. John Health System is committed to honesty and transparency in all of its dealings, which is why we conduct these internal audits. Consistent with our values, we believe that self disclosing these technical oversights was the right thing to do," Bob Sullivan, chairman of the St. John Health System, said in a media release. "The rules and regulations under Stark Law are extremely complex and continually evolving. Upon completing our internal audit, we implemented a new system-wide corporate compliance program to prevent any further reoccurrences."

The False Claims Act prohibits healthcare providers from billing a federal healthcare program for referrals from doctors with whom the providers have a financial relationship. Additionally, the Anti-Kickback Statute prohibits the payment of kickbacks for the referral of services that are paid for under a federal healthcare program.

"This case reflects how we work with providers who self-disclose serious misconduct to efficiently and fairly reach a resolution that protects federal healthcare programs and their beneficiaries," said Daniel R. Levinson, inspector general for HHS.

John Commins is a senior editor with HealthLeaders Media.

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