News & Features

Kalispell Regional Healthcare Penalized for ‘False Certification’ of Federal Compliance

Office of Inspector General fined hospital $65,000 for falsely stating completion of board training

Kalispell Regional Healthcare has been fined for falsely certifying that it completed requirements mandated in a corporate integrity agreement, which was part of the hospital’s $24 million settlement with the federal government last year to resolve allegations of fraud and an illegal kickback scheme.

The U.S. Department of Health and Human Services’ Office of Inspector General (OIG) notified Kalispell Regional Healthcare (KRH) of the $65,000 fine in an Aug. 28 letter. The Health Care Compliance Association’s “Report on Medicare Compliance” first reported the penalty on Oct. 21.

The corporate integrity agreement (CIA) required all hospital board members to complete training within 90 days of the agreement’s effective date. The Aug. 28 letter states that former compliance officer, Tate Kreitinger, who is also the CEO of The HealthCenter, “falsely certified” that all board members had received the training in a January implementation report when six from The HealthCenter had not.

After KRH’s new compliance officer, Mike Onusko, discovered that those members had not received the training, he reported it to the OIG in July, leading to the Aug. 28 letter and fine. Onusko replaced Kreitinger as compliance officer in February.

Nicole Caucci, deputy chief of the OIG’s administrative and civil remedies branch, didn’t speculate in a Nov. 14 interview whether the infraction was an honest oversight or purposeful misrepresentation, but she did say the hospital was unable to offer a “solid answer.”

“There was no clear explanation for why the implementation report indicated it occurred when in fact it had not,” she said.

Caucci added that such infractions “aren’t common.” At any given time, she said the OIG is monitoring 200 to 300 corporate integrity agreements across the country, and its website lists only 13 penalties imposed in all of 2018 and 2019, including the KRH fine. Of those 13, KRH’s fine was the third biggest.

The CIA implementation report submitted to the OIG by KRH on Jan. 21 stated that “the Board of Trustees of Kalispell Regional Healthcare, and a majority of the Board of Managers of HealthCenter received training” on Nov. 15, 2018. The report went on to say that The HealthCenter members who missed the Nov. 15 training “all received training … prior to the end of the 90-day compliance period.”

But those members didn’t receive training until July 2 of this year, shortly after which Onusko notified the OIG of the discrepancy.

“A great deal of work has been done over the last year and we are committed to self-reporting to the OIG any discrepancies we may discover in our ongoing internal assessments,” KRH Director of Communications and Marketing Mellody Sharpton said.

“The important part is that we self-reported,” Sharpton added. “We wanted to make sure we provided the correct information.”

Caucci with the OIG’s office said the false certification won’t alter the CIA process moving forward, but noted that multiple breaches could lead to KRH’s exclusion from federal health care programs such as Medicare and Medicaid.

“We try to reset the playing field and assume they’re going to do their best with compliance moving forward,” she said. “We hope it’s a one-time event that’s been addressed.”

Sharpton said an independent third-party review organization visited KRH on Sept. 9 to conduct an inspection, as required in the CIA. The organization should have its inspection report completed within the month, Sharpton said.

The hospital was required to enter into the CIA on the heels of a $24 million settlement with the federal government in September 2018. The settlement resolved two lawsuits filed by KRH’s former physician network chief financial officer alleging fraud and an illegal kickback scheme among certain physicians and executives. KRH denied any wrongdoing.

The 41-page CIA named KRH along with subsidiaries Kalispell Regional Medical Center, HealthCenter Northwest and Northwest Orthopedics & Sports Medicine.

The federal investigation found that 63 physicians had allegedly been involved in the years-long scheme to boost revenues and enrich themselves. The $24 million settlement is the largest False Claims Act recovery in Montana history.

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