Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, April 14, 1995 TAG: 9504140043
SECTION: VIRGINIA PAGE: B-3 EDITION: NEW RIVER VALLEY
SOURCE: Associated Press
DATELINE: NORFOLK LENGTH: Medium
Colonial Hospital in Newport News paid for $44,278 in airline tickets for 65 patients between September 1992 and January 1994. The federal government then made $1 million in Medicare payments to the hospital for treating the patients.
``That's not a bad deal,'' Assistant U.S. Attorney Alan M. Salsbury said in an interview.
Federal law bars payments or gifts to refer a patient or induce a patient to receive medical services covered by Medicare, the government health insurance for the aged and disabled. The hospital's parent company, Recovery Management Corp. of Coral Gables, Fla., pleaded guilty to offering and paying an illegal remuneration.
This case was the first criminal prosecution under the law in Virginia, said Teresa Drabkin, an investigator for the U.S. Department of Health and Human Services.
``In steering these Medicare patients to their own facility, they were inhibiting fair competition in the marketplace for patients whose care is paid for by federal funds,'' Salsbury said.
The parent company could be fined more than $2 million when U.S. District Judge Henry C. Morgan Jr. holds a sentencing hearing July 14.
The hospital will be automatically suspended from the Medicare program for five years, Drabkin said.
``We made a mistake. We recognize that we made that mistake, and you have to own up to that,'' Bob Lehmann, the hospital's chief executive officer, said in an interview.
The hospital treats patients for psychiatric and substance abuse problems as inpatients and outpatients.
Lehmann said about 52 of the hospital's 60 beds were occupied Thursday, and about 10 of those were Medicare patients. He estimated Medicare pays for about 40 percent of what the hospital charges Medicare-covered patients.
by CNB