An alleged kickback scheme that a California health system settled for $31.5 million involved steering physicians to use its Epic EHR.
Here are nine things to know:
1. Fresno, Calif.-based Community Health System and affiliate Physician Network Advantage agreed to the settlement with the U.S. Justice Department in May to resolve allegations they violated the False Claims Act by providing financial benefits to referring physicians.
2. The health system founded Physician Network Advantage in 2010 to expand the use of its Epic EHR to Fresno-area physicians. But an unsealed 2019 whistleblower lawsuit contends the organization bestowed lavish incentives upon physicians for adopting the EHR, including the use of a $1.1 million “state-of-the-art wine and cigar lounge” at its offices known as “HQ2” with table service, meals, and luxury wines and liquors valued at $750,000 to $1.2 million.
3. Physician Network Advantage also gave tens of thousands of dollars worth of trips and gifts to local healthcare executives and physicians, according to the lawsuit.
4. The whistleblower, a former controller of Physician Network Advantage, discovered the alleged scheme after a fire at the offices where he discovered about 1,000 bottles of wine, which an organization official told him were “left over from the holiday party,” according to the complaint.
5. The organization also hired family members of executives and physicians in the Epic EHR network, according to the lawsuit.
6. Physician Network Advantage planned to build an “HQ Ranch” for executives and physicians participating in the Epic EHR, with an even larger wine and cigar lounge, skeet shooting range and off-road vehicle course, the lawsuit states.
7. The health system and Physician Network Advantage provided financial subsidies for providers to adopt the EHR in exchange for government healthcare program referrals, according to the allegations.
8. Becker’s reached out to the health system and Physician Network Advantage for comment. “The whistleblower lawsuit makes claims regarding personal choices that don’t reflect our high standards as a nonprofit health system, or the values of our current leadership team and board,” a Community Health System spokesperson told the Fresno Bee. “And a number of elements in the 2019 lawsuit reflect either inaccurate or incomplete information.”
9. Physician Network Advantage told the newspaper it cooperated with authorities and the “settlement brings this matter to a conclusion without any determination or admission of legal liability.”
