HCA Investigations No Harm to its Finances

In 2007, the DOJ alleges, HCA Physician Services (HCAPS) in Nashville leased space from Diagnostic Associates of Chattanooga, a physician's group, above fair market value, as an incentive to generate patient referrals to its Nashville location and to Parkridge Medical Center in Chattanooga, also a subsidiary of HCA.

Bill Killian, the U.S. Attorney for the Eastern District of Tennessee said in a statement, "Physicians should make decisions regarding referrals to health care facilities based on what is in the best interest of patients without being induced by payments from hospitals competing for their business."

HCA's Parkridge Medical Center is the third Chattanooga-area hospital since 2005 to get caught up in the DOJ's crackdown on healthcare fraud. In August, Memorial Health Care System agreed to a $1.3 million settlement for alleged kickbacks. In 2005, Erlanger Health System settled with the DOJ for $40 million.

As with most healthcare settlements, HCA's Parkridge facility will be subject to a corporate integrity agreement; it will last five years. In an e-mailed statement, Kathy Winn, Director of Marketing for Parkridge, said, "We are pleased the matter is concluded, and we will diligently fulfill the terms of the corporate integrity agreement."