Hospital Fined $9 Million|for Self-Referrals

JOPLIN, Mo. (CN) - A Joplin hospital will pay $9.3 million to settle allegations that it violated federal laws on incentive compensation for doctors.

The Justice Department accused Freeman Health System of violating the Stark Law by providing incentive pay to 70 doctors. The Stark Law prohibits doctors from referring business to hospitals in which they have a vested interest.

"Our priority is protecting the patients," said David M. Ketchmark, Acting U.S. Attorney for the Western District of Missouri.

"These laws are intended to ensure that physicians make referrals for health care services based solely on the medical needs of their patients rather than any financial incentives. These laws also protect the integrity of the government-funded health care benefit programs."

Freeman CEO Paula Baker told The Associated Press that Freeman discovered the issue in its own internal audit in 2009 and reported it to the Justice Department. Baker said the hospital system has changed its compensation structure and a third-party review showed that the violations did not compromise patient care.

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