A settlement has been reached to resolve False Claims Act allegations against Kalispell Regional Healthcare System.
The allegations arose from a lawsuit that claimed Kalispell Regional Healthcare System (KRH) and six subsidiaries, violated the False Claims Act by paying physicians more than fair market value, and by conspiring to enter into arrangements that improperly induced referrals.
According to the government, allegedly between 2010 and 2018, KRH paid excessive full-time compensation to more than 60 physician specialists many of whom worked far less than full-time as a means of securing referrals.
Also, six KRH subsidiaries, HealthCenter Northwest LLC, Flathead Physicians Group LLC, Northwest Horizons LLC, Northwest Orthopedics & Sports Medicine LLC, and Applied Health Services Inc conspired to pay physicians employed at Kalispell Regional Medical Center to induce referrals to HealthCenter and conspired to charge below fair market value for administrative services provided to HealthCenter, which profited the physician investors at Flathead, who had an ownership stake in HealthCenter.
“Financial arrangements that improperly compensate physicians who make referrals to a hospital drive up the cost of health care services for everyone,” said Assistant Attorney General Joseph H. Hunt for the Department of Justice’s Civil Division. “This settlement demonstrates the Department’s determination to enforce federal laws aimed at preventing conflicts of interest between the financial interests of hospitals and physicians and the best interests of the patients they serve.”
The whistleblower, Jon Mohatt, the former CFO of the system's physician network, will receive $5.4 million as his share of the recovery.
