Petaluma Valley Hospital Agreed to Pay $2.9 Million for Allegedly Violating the Civil Monetary Penalties Law by Paying Improper Remuneration in the Form of Commercially Unreasonable Compensation

After it self-disclosed conduct to OIG, Petaluma Valley Hospital (PVH), Petaluma, California, entered into a $2,924,409 settlement agreement with OIG. The settlement agreement resolves allegations that PVH paid remuneration to a medical group and its physician owners (Physicians) in the form of compensation that was commercially unreasonable for the services provided pursuant to their agreements. The OIG further alleged that: (1) the remuneration created financial relationships between the Physicians and PVH: (2) the Physicians referred Medicare beneficiaries to PVH for designated health services and PVH furnished designated health services ordered by the Physicians and submitted the respective claims to Medicare for those services; (3) the financial relationships between PVH and the Physicians did not satisfy the requirements of any exception to the Physician Self-Referral Law (Stark Law); and (4) the referrals of the Physicians to PVH for designated health services, were, therefore, prohibited and the submission of claims to the Medicare program for the improperly referred services violated the Stark law.