08:00 AM

KRH settles case with Department of Justice

Kalispell Regional Healthcare (KRH) has finalized a settlement with the Department of Justice, which includes a payment to the government of $24 million, of which KRH will be responsible for $21.2 million and the Flathead Physician Group, physician investors in The HealthCenter, will be responsible for $2.8 million. While KRH continues to strongly disagree with the allegations, we are relieved to put this issue behind us.

The Board of Trustees carefully considered the ongoing costs and distraction that litigation would impose upon the system, our employees, and the communities we serve. We believe that a settlement allows our system to put this difficult matter behind us and allows our physicians and employees to move forward and focus on providing the excellent care that our community expects.

A complaint filed under seal in 2016 alleged that KRH compensated certain physicians above fair market value. A second complaint filed under seal in April of 2018, by the same party who filed the first, alleged that The HealthCenter overcompensated certain physicians and that The HealthCenter did not appropriately disclose physician investor relationships to patients. During the government’s review, the quality of care our physicians and staff provide was never questioned nor was overutilization an issue.

KRH relies on third party analysis of compensation for all employees at KRH (physicians and staff), which is based on several factors, including benchmarking to national surveys. Competitive compensation attracts the caliber of talent to this area that we believe the people of northwest Montana deserve. Furthermore, we believe the physician investment structure at The HealthCenter complies with regulatory requirements, and disclosure of these relationships has been appropriately provided to patients.

We are immensely proud of our physicians and employees who are devoted to serving our patients and have helped health care in northwest Montana take a giant leap forward. Our mission is and always has been to improve the health, comfort and lives of the people we serve. It saddens us that the complaint’s allegations implied otherwise and regret the toll that this matter has taken on our KRH family and our community. We are glad that this matter will finally be behind us, we’ve secured our bond financing, and we can focus on the future.