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Price tag soars for Whidbey General Hospital violations

Whidbey General Hospital’s violations of a federal law will cost millions of dollars.

The publicly owned hospital had to forego approximately $1.7 million worth of Medicare billings. In addition, the hospital is also paying hundreds of thousands of dollars to resolve the violations.

Hospital Chief Financial Officer Joe Vessey said the hospital had to hold off billing Medicare from doctors involved with the hospital’s Stark Law violations.

“Stark Law prohibits billing from a physician involved in a non-compliant service,” Vessey said in a telephone interview last week.

The hospital self-disclosed its violations in 2008 to the Health and Human Services Office of the Inspector General. Stark Law is a set of guidelines meant to control a hospital’s financial relationship with its physicians. If a contract doesn’t get signed or hospital staff can’t locate a written copy in the files, then the hospital has to resolve the situation and report the incident to the government, hospital spokesperson Trish Rose said in an email.

Whidbey General Hospital has been working to resolve the violations with the Office of Inspector General. Hospital officials initially offered a $230,000 settlement, however, after it was rejected, the amount climbed to $854,000. There is no word yet on whether the settlement amount will be accepted by the Office of Inspector General.

An OIG spokesperson said as a matter of public policy, staff doesn’t comment on matters that may or may not be under investigation by the Office of Inspector General.

Rose highlighted the work hospital staff has done to guarantee future violations don’t take place. Staff reviewed all its contracts with physicians and overhauled the way contracts are tracked.

She added new processes are in place to avoid unintentional contract expirations and ensure physician compensation is consistent with the work performed.

The hospital also underwent several leadership changes since the hospital reported the violations. Tom Tomasino was named chief executive officer, Vessey was named chief financial officer, and hospital commissioners Anne Tarrant and Grethe Cammermeyer were elected to their current positions.

Vessey said that $4.85 million worth of Medicare billings were affected by the Stark Law. Because of the complicated process used to figure out how much a hospital will receive, the hospital only expects to be reimbursed 35 percent of the amount billed.

Whidbey General Hospital billed approximately $72 million to Medicare in 2010, but only received $25 million in reimbursements.

In 2011, the hospital is budgeting to bill Medicare approximately $85 million, which means, if the 35 percent reimbursement rate stays consistent, the hospital will receive nearly $30 million from Medicare.

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