Federal prosecutors say the Ohio nonprofit health system self-reported that it made kickback payments to physicians but disguised them as payments for bogus management services, a violation of the False Claims Act, the Anti-Kickback Statute, and the Stark Statute.
Ravenna, Ohio-based Robinson Health System Inc. will pay $10 million to settle self-disclosed claims that it illegally provided payments to referring physicians, the U.S. Department of Justice said this week.
Federal prosecutors s aid the nonprofit health system self-reported that it made the kickback payments to physicians but disguised them as payments for bogus management services, a violation of the False Claims Act, the Anti-Kickback Statute, and the Stark Statute.
"The Department of Justice has longstanding concerns about improper financial relationships between healthcare providers and their referral sources," Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department's Civil Division said in prepared remarks.
"Such relationships can alter a physician's judgment about the patient's true healthcare needs and drive up healthcare costs for everybody," Mizer said. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make healthcare more affordable."
Robinson Health said in a media statement that the bulk of the violations occurred in 2006 and 2007. The health system reported its potential violations to federal prosecutors after discovering irregularities during a due diligence process that was part of a partnership search.
Robinson's President and CEO Stephen Colecchi said the contracts involved the lease of an office and contracts to provide management and technical services to the hospital and healthcare services coverage to patients of the hospital.
Robinson Health System operates 117-bed Robinson Memorial Hospital, an urgent care facility, imaging facilities, a network of physician practices, and outpatient centers. It has nearly 400 physicians on staff.
"Some of these issues were primarily technical in nature and involved things such our failure to maintain required paperwork or supporting time logs involving these contracts," Colecchi said. "None of the issues identified, in any way, adversely affected the quality or appropriateness of patient care."
"Our intent has always been to comply with the very complex and extremely technical laws governing our relationship with physicians. In hindsight, we should have managed the administration of these contracts more thoroughly to ensure we were fully compliant. We cooperated fully with the United States Attorney and Department of Justice in reporting and resolving the issues that we identified."
Since the irregularities were discovered, Colecchi said Robinson has strengthened internal controls around a centralized process to track and monitor physician agreements to insure proper documentation.
"We have certainly learned a hard lesson from this experience," Colecchi said, "but we are confident that we have taken the appropriate action to insure full compliance in the future."
On Thursday, after the settlement was announced, Cleveland-based University Hospitals said it would move forward with an agreement for Robinson to join the UH health system. "Without question the agreement with University Hospitals will further strengthen Robinson and help us fulfill our mission to provide high-quality patient-centered health care to our patients and the communities that we serve," said Colecchi.
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John Commins is the news editor for HealthLeaders.