COOKEVILLE – At its regular monthly meeting on December 5, 2019, the Cookeville Regional Medical Center Board of Trustees voted on a negotiated settlement of $4.1 million to resolve allegations by the U.S. Department of Justice (DOJ) that the hospital entered into improper contracts. The allegations concerned physician agreements entered into in 2012. None of the federal government’s allegations involved the care provided at the medical center or the fees that patients paid. CRMC continues to deny that it did anything wrong, but has agreed to pay the settlement to avoid the expense and distraction of lengthy litigation with the federal government.
Payment of the settlement will in no way affect the operations, patient care, or patient costs at Cookeville Regional.
“Because we always recognized that it was possible we would reach a point where it made economic sense to settle with the federal government, we have money set aside to pay the settlement without affecting the hospital’s stability,” stated Paul Korth, CRMC CEO. “Given our financial independence, this settlement will be paid out of hospital funds only as CRMC does not receive any taxpayer assistance. We also want to reassure our community that this expense will in no way affect patient care, patient costs, or our operations moving forward. We are pleased that this investigation will now be closed.”
“CRMC has fully cooperated with the federal government as they have investigated these charges,” added Korth. “We do not feel that the medical center has violated any laws and are disappointed that we have been put in this position. Nothing the federal government investigated concerned patient care. This amounts to a paperwork issue and a difference of opinion over how a contract should be structured. Even though we vehemently disagree with the federal government, we also feel an obligation to our community and have decided that a settlement is in our medical center’s best financial interest. We do not want to be subjected to even lengthier litigation that will result in further legal costs.”
The DOJ claimed that a 2012 contract that CRMC entered into with certain cardiologists employed by CRMC violated the Stark Law and the Anti-Kickback Statute, which govern the financial relationships between doctors and hospitals. The DOJ further asserted that CRMC was violating the False Claims Act when it submitted Medicare claims for payment related to services resulting from those physician contracting arrangements. This settlement resolves all of the federal government’s allegations related to those doctors.
“While we are disappointed that the hospital had to endure the distraction and expense of this settlement, we believe resolving it will allow us to focus on continuing to provide high quality care and needed specialty services to Cookeville, Putnam County, and the surrounding region,” Korth Said. “The hospital has a strong compliance program, and we work hard to make sure that we follow the myriad of laws, rules and regulations that govern our operations. We strive to ensure physician coverage so that our residents do not have to travel long distances for specialized care that is better provided within their own community, and we are looking forward to continuing to focus on that mission.”
