Hilo hospital fined $700,000 for federal violation
Hilo Medical Center paid fines totaling $774,542 last month for failing to comply with federal laws governing a contract with a hospital physician.
The fines were paid to the U.S. Department of Health and Human Services, Office of Inspector General, under a July 27 settlement.
The contract discrepancies were discovered by hospital authorities in a 2003 internal audit and disclosed to the federal agency, as required by law, according to a staff memorandum released by the hospital.
According to the settlement, the hospital agreed to pay Dr. Anthony Lim $94,000 as medical director of the oncology division in the July 2001 contract. It also agreed to pay Lim 20 percent of payments received for prescribed chemotherapy drugs.
The audit found that drug reimbursements were reduced to 15 percent in the second year of the contract and limited to specific drugs. "There is no evidence that Lim provided any services as medical director," the settlement said.
Physician contracts are covered by federal laws that regulate compliance with Medicare, Medicaid, Veterans Affairs and other health care programs.
The settlement also requires the hospital to determine if it collected any unallowable costs from those federal programs, and to reimburse any overpayments.
The hospital will be required to establish procedures to ensure that arrangements with physicians and other health care providers comply with federal laws. It must provide staff training and maintain a compliance program. It will report annually to the Office of Inspector General throughout the three-year duration of the "corporate integrity agreement."
"We are humbled by this matter and are engaged in ongoing efforts to make the necessary changes to better respond to the health care needs of the East Hawaii community," said Ronald Schurra, chief executive officer, in the hospital's written release. He was not available for comment yesterday.