White Memorial Medical Center Agrees to Pay $14.1 Million to Settle Allegations of Illegal Kickbacks to Doctors
by Adventist Today News Team
Last Friday (May 3) the United States Department of Justice announced that Adventist Health System/West, the nonprofit corporation that controls White Memorial Medical Center in Los Angeles, had agreed to pay $14.1 million to avoid going to trial on charges that it violated laws prohibiting payments to doctors to get them to refer their patients to the hospital. The allegations were first filed in 2008 by two doctors who will receive $2.8 million of the total under the "whistleblower" law.
By Monday the story had been picked up by the Los Angeles Times, the Wall Street Journal, The Sacramento Bee and a number of other news publishers in California and across the country. Government authorities "pay close attention to the financial relationships between hospitals and doctors out of concern that patients will receive unnecessary tests and treatments, often at the expense of taxpayer-supported health programs," the Times explained. "White Memorial violated anti-kickback laws by overpaying certain physicians and giving them other improper inducements in return for patient referrals."
Financial arrangements of this kind "cost taxpayer dollars and undermine the integrity of medical judgments," the Los Angeles newspaper quoted United States assistant attorney general Stuart Delery. "White Memorial said it cooperated fully with the government investigators and that the settlement related to financial relationships that were entered into more than a decade ago," the Times also reported.
Out of the total settlement, $11.5 million will go the Federal government and $2.6 million to the California Department of Health Care Services, according to The Sacramento Bee, the major news organ in the state capital. The largest share will go into the Medicare Trust Fund.
The lawsuit alleged that doctors were given inflated payments for teaching at White Memorial which is the location of a number of medical training programs, as well as gifts of equipment and supplies. These payments were charged to be in violation of the Anti-Kickback Act, the Stark Statute and came under the terms of the False Claims Act, which allows individual citizens to sue to recapture funding provided by the government that may have been used by the hospital in illegal arrangements.
The U.S. Justice Department stated that the action was "part of the government's emphasis on combating health care fraud." It also said, "as part of the settlement, White Memorial has entered into a comprehensive five-year Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure its continued compliance with federal health care" laws and regulations.
"Clearly this is not a good witness for the Church and is outside the intentions of the Adventist Church for its health ministries," a retired administrator told Adventist Today. "At the same time, it must be kept in mind that these structures and polices are very complex. There may not have been any intention to do something wrong. There is much competition in health care these days, and an inner city hospital like White Memorial is difficult to keep funded."
Adventist Today has recently published extensive data about the high salaries paid some executives in some health care organizations affiliated with the Seventh-day Adventist Church. "This may seem counter-intuitive," the retired administrator said, "but it may be that mistakes were made because we did not pay enough to get someone with greater capability than those who made bad decisions in this case. It would be stupid to assume that the high salaries and the wrong-doing are necessarily cause and effect."
