California hospital to pay $3.2M to resolve Stark Law allegations

Tri-City Medical Center, a 397-bed hospital in Oceanside, Calif., has agreed to pay the federal government more than $3.2 million to resolve allegations it violated Stark Law and the False Claims Act, according to the Department of Justice.

The settlement resolves allegations that Tri-City Medical Center entered into 97 financial arrangements with physicians and physician groups that did not comply with Stark Law. Five of the arrangements were with the hospital's former chief of staff and were entered into between 2008 and 2011. Ninety-two of the arrangements, which were entered into from 2009 until 2010, were with community-based physicians and practice groups.

Regarding the settlement, U.S. Attorney Laura E. Duffy of the Southern District of California said, "Patient referrals should be based on a physician's medical judgment and a patient's medical needs, not on a physician's financial interests or a hospital's business goals."

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