DOJ Settlements - Personal Liability for Executives

Once again, Department of Justice settlements are in the news and a healthcare executive was hit with a major fine.

For the second time in less than one year, Prime Healthcare Services Inc. and founder and CEO Prem Reddy, MD, have reached an upcoding settlement with the U.S. Department of Justice. Reddy and the for-profit health system, based in Ontario, California, this week agreed to pay $1.25 million to settle additional whistleblower allegations that two Prime hospitals in Pennsylvania—Roxborough Memorial Hospital in Philadelphia and Lower Bucks Hospital in Bristol—knowingly submitted false claims to Medicare, a violation of the False Claims Act.

It is clear that hospital executives remain at individual risk. Hospital executives are ultimately responsible for protecting their organization, and themselves, from violations and fines.

In order to reduce the possibility of violations occurring, MD Ranger suggests that executives:

  1. Take a hands-on approach to working with their team to ensure compliance processes and procedures are effective.
  2. Use robust, apples to apples market data in every situation and negotiation.
  3. Be sure that everyone within the organization understands the importance of documentation. Don't cut corners with documentation.
  4. Understand the steps that are being taken to ensure the organization is compliant.

While many hospital organizations have few resources to spare, negotiating compliant arrangements are a must; not only for the hospital's sake, but the sake of the executives themselves. Though it may be difficult to marshal resources, make sure contracting processes exist and documentation occurs for each contract to ensure that no individual is fined in the event of an investigation.

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