Whidbey Island Public Hospital District in Coupeville, Wash., agreed to pay $858,571 to settle allegations that it violated the civil money penalty law related to Stark and kickbacks, the HHS Office of Inspector General said in late December. That’s a large fine for a single-hospital CMP settlement, although Whidbey is not alone. During the last week of December, OIG unveiled several other CMP cases stemming from hospital-physician deals that allegedly ran afoul of the fraud and abuse laws.

Whidbey self-disclosed potential problems to the OIG and was accepted into its self-disclosure protocol on Dec. 18, 2008. Ultimately, OIG contends it had more than 100 violations stemming from physician contracts and arrangements. The settlement describes the various contracts and their compliance problems. Among them:

• Missing signatures on call-coverage contracts,

• No contracts for medical staff leadership arrangements,

• Missing signatures on hospitalist arrangements,

• An office-space lease that had a contract term of less than a year,

• An office-space lease with contract terms that were ambiguous,

• A personal services arrangement with a contract term of less than one year,

• An equipment loan without an written agreement,

• A housing allowance with no contract.

The settlement says that Whidbey paid physicians the remuneration between Jan. 1, 1999, and Dec. 31, 2009.

The spokeswoman for Whidbey, a small hospital, was unavailable for comment and the compliance officer did not return RMC’s call. The hospital did not admit liability in the settlement.

In another case announced at the same time, three West Virginia hospitals that are part of the same system — City Hospital, Inc., Jefferson Memorial Hospital and West Virginia University Hospitals-East — agreed to pay $949,595 to settle Stark and kickback-related CMP violations. The allegations center on recruitment and lease payments. The hospital also self-disclosed to OIG.

OIG alleged the hospitals did not charge physicians for medical office space, and paid them in excess of physician recruitment terms, including “(1) payments of costs and expenses pursuant to recruitment agreements in excess of the actual additional incremental costs; (2) payment of student loans without a written recruitment agreement; and (3) payment of costs and expenses pursuant to unwritten extensions of recruitment agreements,” OIG said.

Mark Fitzgerald, an attorney for the hospital, declined to comment on the settlement at his client’s request. The West Virginia hospitals don’t admit liability in the settlement.

In a third case, Natividad Medical Center in California agreed to pay $174,508 to settle CMP allegations pertaining to Stark and kickbacks after self-disclosing to OIG. The OIG alleged that Natividad entered into a professional medical services agreement with a physician group for specific call coverage and clinic services. Between Jan. 1, 2010, and Aug. 31, 2010, OIG contends, the hospital paid certain physicians pursuant to a professional services agreement. “The compensation terms of the agreement offered incentives for the physician group to refer their private practice and medically indigent adult patients to [Natividad Medical center],” the settlement says.

Natividad’s attorney, Katherine Lauer, did not return RMC’s calls. The hospital did not admit liability in the settlement.

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