Fresno, Calif.-based Community Health System and its affiliate Physician Network Advantage have agreed to pay $31.5 million to settle allegations they provided extravagant benefits to physicians in exchange for patient referrals to the system’s facilities.
Five things to know:
1. Physician Network Advantage is a healthcare technology company formed and founded by the system to support Fresno-area physicians’ adoption of Community’s EHR platform, according to a May 14 Justice Department news release. The department alleges that with Community’s knowledge and funding, the company provided expensive wine, liquor, cigars and meals to referring physicians at a lounge located in its offices.
2. The settlement also resolves allegations that the system and Physician Network Advantage provided subsidies for EHR technology and equipment used by certain physicians in their private offices in exchange for the referral of governmental healthcare program patients to Community.
3. In connection with the settlement, Community entered into a five-year corporate integrity agreement with the HHS Office of Inspector General that requires the implementation of a risk assessment and internal review process designed to identify and address evolving compliance risks.
4. Whistleblower Michael Terpening will receive $5 million as part of the settlement.
5. The settlement resolves allegations, and there has been no determination of liability. The system’s board chairman, Roger Sturdevant, said Community embraced the federal government’s 2009 directive to transition to EHRs, according to GVWire.
“However, it is clear we needed stronger oversight measures to assure that both Community and our vendor partner maintained appropriate compliance at all times,” he said, according to the report. “While we are confident that physician referrals were driven by Community Health System’s position as a leading provider of hospital-based and specialty services, we recognize that even the appearance of inappropriate incentives must be addressed.”
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