The Department of Health and Human Services has announced that Sentara Healthcare, the Hampton Roads area hospital and insurance conglomerate has paid a $4.3 million fine for the submission of “improper claims” for observation services for patients at Sentara hospital emergency rooms.

In a release, the HHS Office of the Inspector General said “Sentara submitted, or caused the submission of, improper claims for observation services provided to patients discharged from the emergency departments of Sentara’s hospitals when there was inadequate support for the medical necessity or reasonableness or for the amount of units, or when there was no physician order for the observation services provided.”

HHS said Sentara reported the alleged conduct itself and paid the fine after the IG office alleged that the company violated the “Civil Monetary Penalties Law.”

According to a 1989 medical journal article, the law “authorizes the Secretary of Health and Human Services to impose civil money penalties, an assessment, and program exclusion for various forms of fraud and abuse involving the Medicare and Medicaid programs.”

Penalties can range from $2000 to $100,000 per violation.

The fine, announced by HHS in July, received no coverage by the newspaper in Sentara’s hometown – the Virginian-Pilot – which has also been noticeably tame in its reporting on the largest business in its circulation area.

Sentara forced to scrap merger

So far this year, Sentara has had to scrap a proposed $11.5 billion merger with North Carolina’s Cone Health and faced critical reporting of its business methods, including how it manipulated Virginia’s Certificate of Public Need (COPN) process.

In May, C&BP reported that Sentara appeared to have overcharged patients without insurance, according to a bill provided by a former patient and the company’s own medical billing documents.

In July, Checks and Balances Project reported on signs from the Justice Department that practices such as Sentara’s may come under heightened scrutiny.

As writer James Sherlock noted in a column in Bacon’s Rebellion, “The clouds have darkened over Virginia’s healthcare monopolies.”

In other Sentara-related news, Old Dominion University and Norfolk State University announced in August that they were forming a school of public health with Eastern Virginia Medical School (EVMS). The state funded $5 million to develop plans for the joint school, which is also supported by $4 million from Sentara. EVMS is also starting a center for health equity with Chesapeake Regional Medical Center and Riverside Health, two of Sentara’s main rivals.

Ray Locker is executive director of Checks and Balances Project, an investigative watchdog blog holding government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.

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