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After Blowing Whistle on Itself, Utah Hospital Chain Agrees to Pay $25.5 Million

Utah’s Intermountain Healthcare Inc. will pay $25.5 million to settle claims that it violated federal laws, including the Stark Law against profit-driven referrals by doctors.

The healthcare network, based in Salt Lake City, had voluntarily reported the issues to the U.S. Department of Justice in 2009. In a statement the non-profit company didn’t admit liability but portrayed its conduct as a “primarily technical” failure to comply with “nearly 300 pages of federal regulations and commentary.”

Intermountain made its confession “recognizing full well that there would be an economic consequence,” Brent Wallace, its chief medical officer, told The Salt Lake Tribune.

Mr. Wallace said the company, which is often cited as a paragon of affordable medical excellence, discovered its problems during a review that was inspired by its executives’ attendance at a conference about the Stark Law, which forbids doctors from benefiting from referrals they provide to Medicare patients.

Intermountain may have violated the law for about 10 years by paying bonuses to doctors based on referrals, according to the settlement agreement, and also via improper leases and other financial arrangements with doctors who sent patients to its network.

In its statement, Intermountain said it was “embarrassed” by the lapse, but denied that it ever affected the quality or cost of patient care.

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