Two Montana Hospitals Settle Stark Law Allegations for $4 Million

Twitter icon
Facebook icon
LinkedIn icon
e-mail icon
Google icon

St. Vincent Healthcare in Billings and Holy Rosary Healthcare in Miles City have paid the Department of Justice (DOJ) $3.95 million plus interest to settle allegations that the hospitals paid physicians for referrals.

The settlement means that neither hospital needs to admit fault in the allegedly prohibited financial arrangements with referring physicians. According to the U.S. Attorney for the District of Montana, Michael Cotter, the case shows how the DOJ will work with health care providers who disclose their misconduct.

The settlement came about through a partnership between the Department of Health and Human Services (HHS) and the DOJ named the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative. Since 2009, when HEAT was formed, the DOJ has recovered just over $14.2 billion.

"There is an expectation that corporations providing services to Medicare and Medicaid beneficiaries adhere to the provision of the Stark Law. I applaud St. Vincent Healthcare and Holy Rosary Healthcare for recognizing their potential liability in this matter and making a disclosure," said Gerry Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Montana in a statement on the DOJ website.

The hospitals are owned by the Sisters of Charity of Leavenworth Health System, which has recently sold some of its troubled charity hospitals. Just one month ago, the attorney general of Kansas approved its sale of Providence Medical Center in Kansas City and St. John Hospital in Leavenworth to Prime Healthcare. (Read more here.)

Although there is no indication the two Montana hospitals are for sale, settling harmful legal allegations that could frighten away buyers is an important first step in any sale.