THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, July 29, 1995 TAG: 9507290321
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: NORFOLK LENGTH: Short : 41 lines
A Florida-based hospital company that admitted paying plane fares to fly Medicare patients to a Newport News psychiatric facility it owns paid a $250,000 fine Friday to settle the case.
The amount of the fine, negotiated and jointly proposed by federal prosecutors and attorneys for Recovery Management Corp. of Coral Gables, Fla., was accepted by U.S. District Judge Henry C. Morgan Jr.
Recovery Management, parent company of Colonial Hospital in Newport News, admitted in April to paying $44,278 for plane tickets to fly 65 patients from 19 states to the Virginia facility between September 1992 and January 1994.
The company subsequently was paid $1,037,958 by Medicare for treating the patients.
Recovery Management, which pleaded guilty to a single count of paying an illegal remuneration, could have been fined a maximum of $2 million, or twice the amount of Medicare money it received, and was subject to a minimum fine of $474,492 under federal guidelines.
But Morgan said the financial condition of the corporation, which the law allows to be taken into consideration, left uncertain whether it could pay such a large amount and remain in business.
The negotiated fine, which under terms of the agreement had to be paid immediately, ``strikes an appropriate balance between the seriousness of the case and the ability of the corporation to pay,'' Assistant U.S. Attorney Alan M. Salsbury told the judge.
Federal law prohibits payments or gifts to induce patients to receive a particular medical provider's Medicare-covered services.
As a result of the court case, Colonial Hospital has been removed from the Medicare program for five years. by CNB