Hospital settles with government for $24 million

September 29, 2018

Kalispell Regional Healthcare has reached a settlement with the federal government for 21.1 million and the Flathead Physician Group, physician investors in The HealthCenter, will pay 21.5 million in advance of a settlement.

The settlement ends a whistleblower suit filed by Jon Mohatt, the former chief financial officer of Kalispell Regional’s Physician Network, in September of last year. The suit alleged that the hospital compensated physicians far above fair market rates and reaped financial benefits from a system of self-referrals dating back to at least 2011.

Mohatt will receive $5,411,521 as his share of the recovery in the cases, according to the U.S. Department of Justice.

The hospital has refuted charges of wrongdoing, including in Friday’s announcement. “While KRH continues to strongly disagree with the allegations, we are relieved to put this issue behind us,” said Robertson.

The settlement will contain a Corporate Integrity Agreement with the federal government, which establishes guidelines for the hospital’s compliance program for federal statutes. The agreement “will be an additional tool to demonstrate our strong compliance surrounding providers who refer to KRH,” said Robertson.

Robertson wrote that the board weighed the cost and distraction of potential litigation, and judged that settling with the government offered the best chance to “move forward and focus on providing the excellent care that our community expects.”

The hospital ”[regrets] the toll that this matter has taken on our KRH family and our community,” said Robertson. “We are glad that this matter will finally be behind us, we’ve secured our bond financing, and we can focus on the future.”

Reporter Adrian Horton can be reached at 758-4439 or at ahorton@dailyinterlake.com.

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