Merger Due Diligence Uncovers Stark Act Violations at Massachusetts’s Saints Medical Center

Saints Medical Center in Lowell, Mass., self-reported to the federal government technical violations of the Stark Act in contracts with physicians, according to a report by The Sun.

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The violations were discovered by legal teams at Saints Medical and Lexington, Mass.-based Covenant Health, which were undergoing due diligence as the two groups explored a merger. The violations occurred in the early 1990s, and controls are now in place at the hospital to ensure complaint contracts, Saints’ interim CEO Stephen Guimond said in the report.

Saints Medical Center will pay a civil fine to the federal government ranging from $785,000 to $14.5 million, according to the report.

The merger between the two groups is expected to move forward.

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