Naughty, Naughty Hospitals

Every major health care conference I attend there are compliance seminars. Sometimes I listen, sometimes I teach the seminar. No serious person in health care has not attended a compliance seminar. Right?

So, does everybody sleep through the compliance programs, or just some executives and some physicians?

The recent Adventist and the Broward Hospital settlements should put fear in the hearts of hospitals employing physicians and also in the physicians themselves.

The two organizations have settled whistleblower qui tam cases with the federal government for more than $200 million with legal fees, [  1  ] both for structuring physician contracts to pay more than fair market value and to reward referrals.

The Broward case started with the Stark statute and bootstrapped onto the anti-kickback and false claims act. The Adventist case started with the Stark statute and hopped onto the false claims act. Adventist was also hit with upcoding and unbundling Medicare charges.

So what was happening?

The physicians were paid more than fair market value, comparing their salaries to local salaries and MGMA salary study numbers. Way more.

The physicians were paid more than the profits-before-compensation from their practices.

Some of the physicians were paid salaries and benefits higher than their entire cash collections!  Never mind operating expenses.

After physician compensation the practices were losing massive amounts of money – made up to the parent hospital with revenue the hospital generated by physician referrals.

Wow.



[1]  settlements were Broward = $69.5 million, Adventist = $118.7 million