LAWFUEL – US Legal Newswire – Community Memorial Health System (CMHS), formerly known as Community Memorial Hospital of San Buenaventura, has agreed to pay the government $1,520,717.47 to settle allegations that it submitted claims to the federal government that violated the federal False Claims Act, as well as the federal anti-referral law known as “the Stark law.”
The Stark law provides that, subject to some exceptions, a physician may not refer patients for certain Medicare-covered health services to a hospital or other entity with which the physician or an immediate family member has a financial relationship. The law also prohibits the hospital from billing for any services provided as a result of a prohibited referral.
The settlement, which was finalized today, resolves allegations that CMHS made prohibited payments to physicians who referred Medicare patients to CMHS. The payments were made in the form or interest-free loans, rental arrangements at below-market rents, employment arrangements with physicians’ family members and gifts. CMHS’ claims to Medicare for reimbursement therefore allegedly violated the Stark law and the False Claims Act.
Today’s settlement results from two self-disclosures to the government by CMHS in 2005 and 2006. The hospital reported financial arrangements with certain physicians and/or family members that it believed may have violated the Stark law. CMHS paid the settlement without admitting any wrongdoing.
The settlement was negotiated and investigated by the United States Attorney’s Office for the Central District of California.
CONTACT: Assistant United States Attorney Wendy Weiss
Civil Fraud Section
Release No. 07-168