Intermountain self-reports concerns to federal government

Intermountain Healthcare has reached a settlement agreement with the federal government that fully resolves issues Intermountain had previously self-disclosed in 2009 involving certain leases and contracts with some physicians.

Under the settlement agreement, Intermountain will pay the federal government $25.5 million.

Through its regular review processes, Intermountain discovered some issues where it might be out of compliance with the complex federal Stark Law and regulations regarding physician relationships, and promptly and voluntarily disclosed them to the U.S. Attorney for Utah for review. Intermountain's management recognized that potential penalties could be significant, but at no time was there ever any consideration given to not self-disclosing the issues.

These issues were primarily technical in nature and involved things such as lack of proper paperwork involving leases of physician offices and service agreements. That individual physicians are listed in the attachments to the agreement does not mean that a physician committed any wrongdoing of any kind. These issues were self-disclosed in 2009 and have been corrected.

None of these issues adversely affected in any way the quality, appropriateness, or cost of patient care at Intermountain hospitals and clinics. In fact, Intermountain has consistently been featured in national studies and media reports for both its high quality and cost-effective care. For example, a Dartmouth study found that if all hospitals provided care like Intermountain facilities, the nation would see about a 40 percent reduction in costs.

The issues arose in part due to the complexity of nearly 300 pages of federal regulations and commentary governing relationships between hospitals and physicians that have evolved and changed over time and were modified in 2007. Intermountain should have monitored this situation more closely. We are embarrassed that these issues occurred and regret that our controls at the time were inadequate to properly monitor these matters.

Since discovering these concerns Intermountain has improved its controls by implementing a rigorous centralized process to track all physician agreements. Intermountain added additional staff, implemented advanced tracking software, created oversight councils, and put additional training in place to assure compliance with all relevant regulations. Intermountain will continue the practice of regularly evaluating and monitoring all business practices to ensure legal and regulatory compliance. We have learned from this experience and are a better company as a result.