Kalispell Regional reaches settlement; terms under seal

September 26, 2018

Kalispell Regional Healthcare has officially reached a settlement in the whistleblower lawsuit brought by the former CFO of its Physician Network, ending a year-long federal investigation, according to a court notice published Wednesday.

The exact settlement and documents pertaining to the case remain under seal, at the request of the government, who has until 5 p.m. today to offer a justification for that request.

The court will dismiss with prejudice a whistleblower lawsuit brought by Jon Mohatt, the former CFO of Kalispell Regional’s Physician Network, which was first filed in September 2017. The suit alleged that Kalispell Regional knowingly violated federal anti-kickback and compensation statutes dating back to at least 2011, under its late CEO, Velinda Stevens. The potential violations included paying certain physicians at rates far above fair market value and incentivizing staff to engage in a lucrative scheme of self-referrals.

The hospital has maintained that it did not participate in any wrongdoing. It has also previously stated that it set aside $21.5 million in advance of a potential settlement.

According to Wednesday’s court notice, the court declines to “retain jurisdiction over enforcement of the parties’ settlement agreement.” U.S. District Judge Donald W. Molloy has given the government until 5 p.m. today to justify its request to keep documents under seal.

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