A hospital chain based in Roseville has agreed to pay $14.1 million to settle allegations that one of its hospitals over-compensated a group of doctors so they'd refer patients to the facility.
Roseville's Adventist Health agreed to pay $11.5 million to the U.S. government and $2.6 million to the California Department of Health Care Services to settle the case, which involved a hospital in Los Angeles.
A portion of the settlement, totaling $2.8 million, will go to the two doctors who alerted authorities to the issue. They're receiving the money under the whistle blower provision of the federal False Claims Act.
The case dates to 2008, when the doctors sued Adventist in U.S. District Court in Sacramento over the way doctors were being compensated by White Memorial Medical Center in Los Angeles.
Eric Havian, one of the doctors' lawyers, said the payments violated federal laws. Doctors should refer patients to a particular hospital "because it's the best place you should go for treatment, not because (the doctors) got a little perk."
He said his clients "wouldn't play ball" with the arrangement and received less favorable treatment at White Memorial.
Another lawyer for the doctors, Michael Hirst, said, "Patients have the right to their doctors' best judgment without worrying that the judgment has been tainted by financial gain."
Some doctors received inflated fees for teaching at the hospital, according to the lawsuit. Another group of doctors received medical supplies and other assets at no charge. The hospital also forgave loans made to some doctors.
Officials with Adventist couldn't be reached for comment. The chain operates 19 hospitals in the West, but none in the Sacramento area.