Oroville Hospital has agreed to a $10.25 million settlement with the United States and the State of California over allegations of violating the False Claims Act and the Anti-Kickback Statute. This resolution was announced by U.S. Attorney Phillip A. Talbert.
The allegations claim that Oroville Hospital engaged in illegal kickbacks and physician self-referral schemes, offering incentives to physicians for admitting patients to the hospital. Additionally, it is alleged that false claims were submitted to Medicare and Medi-Cal for unnecessary admissions and incorrect diagnosis codes. The federal government will receive $9,518,954 from this settlement, while $731,046 will go to California.
U.S. Attorney Talbert stated, “Physicians should make decisions based on the best interests of their patients, not their own personal financial interests.” He emphasized that hospitals involved in such schemes compromise community trust and affect care decisions negatively.
Principal Deputy Assistant Attorney General Brian M. Boynton highlighted the misuse of federal healthcare funds: “Improperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans.”
The settlement also addresses claims that Oroville Hospital paid bonuses to physicians based on patient admissions, even when inpatient care was deemed unnecessary. These actions allegedly led to inflated claims being submitted for reimbursement under Medicare and Medicaid programs.
As part of this agreement, Oroville Hospital entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). This includes implementing risk assessments and internal reviews to address compliance risks and having an independent review organization evaluate certain claims annually.
The civil settlement resolves a qui tam lawsuit filed by whistleblower Cecilia Guardiola under provisions allowing private parties to sue on behalf of the United States. Ms. Guardiola will receive approximately $1.8 million from this settlement.
Assistant U.S. Attorney Steve Tennyson managed this case for the U.S. Attorney’s Office as part of a coordinated effort involving multiple governmental bodies including the Justice Department’s Civil Division and California's Department of Justice.
It is important to note that these resolved claims are only allegations with no determination of liability made against Oroville Hospital.