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Hospital nears settlement of lawsuit over doctor pay

August 1, 2018

KALISPELL, Mont. (AP) — A hospital that is accused of paying some of its physicians at above-market rates in exchange for patient referrals to in-house services is nearing a settlement.

Kalispell Regional Healthcare has reached a “settlement in principle” involving a whistleblower lawsuit and has booked a $21.5 million regulatory expense, including $1.5 million in legal fees, as a reserve this fiscal year, the Flathead Beacon reported Tuesday. The proposed settlement still must be approved by a federal judge before the complaint is dismissed.

The recently unsealed complaint was filed by Jon Mohatt, the hospital’s physician network chief financial officer. It argues that the practice enriched senior executives and specialist physicians and could have negatively affected patient care.

The hospital, which disputes the allegations, must participate in a mandatory compliance program as part of the proposed settlement. The program would impose new duties on staff to monitor, report and certify that the hospital’s financial arrangements with physicians meet federal requirements involving health care programs like Medicare and Medicaid.

“They’ve got to play by the rules going forward now,” said James Alderson, the CFO at North Valley Hospital in the 1990s and who also was involved in a whistleblower lawsuit. “It’s not just pay the fine and go back to business as usual. Otherwise they could be excluded from Medicare. That’s the hammer the government has, and it’s a big hammer.”

All of the allegations against Kalispell Regional Healthcare stem from former president and CEO Velinda Stevens’ tenure, before Pamela Robertson took over in October. Stevens died in January 2017.

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Information from: Flathead Beacon, http://www.flatheadbeacon.com

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