OROVILLE, Calif. -- Oroville Hospital has agreed to pay more than $10 million to the state and federal government, as well as two private plaintiffs, to resolve allegations the hospital violated the False Claims Act and the Anti-Kickback Statute, according to the Department of Justice.
The hospital on Olive Highway in Oroville allegedly paid kickbacks to physicians for the number of patients they admitted to the hospital, as well as knowingly submitted false claims to Medicare and Medi-Cal for systemic inflammatory response syndrome (SIRS), which resulted in excessive reimbursement to the hospital, according to the U.S. Attorney's Office.
The settlement additionally resolves allegations that Oroville Hospital admitted patients as inpatients when it knew inpatient care was not medically necessary.
"Physicians should make decisions based the best interests of their patients, not their own personal financial interests," said U.S. Attorney Phillip Talbert. "Hospitals engaging in kickback schemes betray the trust placed in them by their communities and distort care decisions that should be untainted by illegal kickbacks. This settlement demonstrates my office's commitment to preserving the integrity of public healthcare programs and ensuring that the well-being of patients remains paramount."
From the $10.25 million settlement, Oroville Hospital will have to pay more than $9.5 million to the federal government and $731,046 to California.
The Department of Justice said the civil settlement also includes the resolution of claims brought forward under the whistleblower provisions of the False Claims Act by Cecilia Guardiola, who will receive $1.8 million.
The hospital said the settlement announced Thursday reflects its commitment to bringing closure to disputes that started in 2019, and will help avoid the uncertainty and expense associated with litigation.
In connection with the settlement, Oroville Hospital entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General. It will require implementing a risk assessment and internal review process that is designed to identify and address compliance risks.
The Corporate Integrity Agreement will also require an independent review organization to assess both the medical necessity and appropriateness of select claims billed to Medicare annually.
"Improperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans," said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department's Civil Division. "We will continue to advocate for the appropriate use of Medicare and Medicaid funds, and we will pursue healthcare providers who defraud taxpayers by knowingly submitting false claims."
The U.S. Attorney's Office said the settlement came through a coordinated effort between the Eastern District of California, the Justice Department's Civil Division, Commercial Litigation Branch, Fraud Section, the Department of Health and Human Services, Office of the Inspector General, and the California Department of Justice, Division of Medi-Cal Fraud and Elder Abuse.
The Department of Justice said claims resolved by the settlement are still allegations only, and there has been no determination of liability.
Oroville Hospital said it made no admission of wrongdoing, noting in a press release that, "it would have prevailed if the case was decided on a level playing field and categorically denying any violation of the law."
"The Hospital had successfully disproved related cases," noted Hospital CEO Robert Wentz. "Had we chosen to contest the allegations, I am confident that, ultimately, the Hospital would have prevailed in a fair trial of the facts."