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Inspector General Fines Three Hospitals, One Doctor, and a DME Firm

Cheryl Clark, for HealthLeaders Media, August 18, 2009

Health providers have been assessed fines totaling $1.43 million for allegedly conducting improper kickback and physician self-referral practices and for filing false and fraudulent claims with the federal government, the Office of Inspector General announced yesterday.

In each case involving a civil monetary penalty that is resolved through a settlement agreement, the settling party "has contested the OIG's allegations and denied any liability. No CMP judgment or finding of liability has been made against the settling party," the OIG said in a statement.

Most penalties are resolved through settlements with no decision made on the merits of the allegations or the respondents' defenses.

The penalties were assessed as follows:

  • Ediberto Soto-Cora, MD, of Texas agreed to pay $534,000 for allegedly submitting false or fraudulent claims by using CPT codes that would generate higher reimbursement than justified by the medical documentation, or Soto-Cora submitted claims without any supporting medical documentation.
  • Clifford Koon, Jeffrey Cowan, and William Dorvall of Florida, former owners and officers of Matrix Diabetics Inc., (a durable medical equipment company) agreed to pay $260,000 for allegedly causing Matrix to pay telemarketing firms to make unsolicited calls to Medicare beneficiaries to market medical equipment on behalf of Matrix. The company in turn submitted claims for these items for Medicare reimbursement, contrary to the Social Security Act.

    The act prohibits equipment suppliers from making unsolicited phone calls to Medicare beneficiaries regarding the furnishing of covered items "except in certain situations that were not present in this case." The law prohibits payment to a supplier who knowingly submits a claim generated pursuant to prohibited telemarketing calls.

  • Inova Health Care Services, also known as Inova Fairfax Hospital in Virginia, agreed to pay $528,158 for allegedly making payments to Arrhythmia Associates in the form of services provided by certain physician assistants, in violation of rules prohibiting kickbacks and physician self-referrals. "Specifically, Inova provided PA services to AA without written contracts in place and failed to bill and collect for those PA services. Inova disclosed this conduct to the OIG.
  • Kahuku Hospital in Hawaii self-disclosed to the OIG and agreed to pay $75,000 for entering into agreements with emergency room physicians. In the agreements, payments allegedly were made in excess of the amount provided for in the agreement. The hospital also allegedly entered into other arrangements with emergency room physicians that were not in writing, in violation of provisions applicable to rules prohibiting kickbacks and physician self-referrals.
  • In another self-disclosure, Memorial Hospital of Union County, Ohio agreed to pay $31,202 for allegedly providing excess non-monetary compensation to physicians and the immediate family member of a physician who referred patients to Memorial Hospital. The conduct allegedly violated prohibitions against kickbacks and physician self-referrals.

The new fines bring the total of OIG fines so far this year to 21, five of which involved charges of kickbacks or improper physician self-referral practices and 16 of which involved charges of false and fraudulent federal claims.

The OIG says that when a healthcare provider "appropriately self-discloses potentially fraudulent conduct, the OIG takes the self-disclosure and the provider's level of cooperation into account when determining the appropriate settlement terms."


Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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