Troubled Tri-City to pay $3 million for breaking laws

Oceanside's Tri-City Medical Center, a hospital long plagued with management and labor problems, today (January 15) agreed to pay $3.3 million to resolve allegations it violated laws regarding its financial relationships with community physicians. The arrangement was announced by the Department of Justice in Washington, D.C.

The agreement focused greatly on the Stark Law, which forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital. There are exceptions to the law, but the doctor relationships at Tri-City did not qualify as exceptions. Today's settlement resolves allegations that Tri-City had 97 financial arrangements with doctors that did not comply with the Stark Law.

The hospital identified five arrangements with its former chief of staff that did not appear commercially reasonable. Another 92 financial arrangements did not satisfy Stark Law exceptions because of such things as expired agreements and missing signatures.

Through the years, the hospital has been steeped in controversy over its labor relations and management. At one point, it put eight of its top administrators on leave.