US Department of Justice Confirms Large Corporate Owned Hospitals Involved in Illegal Contracting Schemes in McAllen Texas, Not Physician Owned Hospitals

US Department of Justice Confirms Large Corporate Owned Hospitals Involved in
Illegal Contracting Schemes in McAllen Texas, Not Physician Owned Hospitals

WASHINGTON, Nov. 2 /PRNewswire/ -- Over the last few months, concern over
healthcare costs in McAllen, Texas has been incorrectly aimed by a few in
Congress toward physician ownership. However, current federal action in
McAllen, Texas has uncovered the real problem - large, corporate hospitals who
now owe millions for their illegal contracting schemes.

Last week, the Department of Justice (DOJ) announced that its McAllen, Texas
investigation of violations of the "False Claims Act, the Anti-Kickback
Statute and the Stark Statute" has resulted in a $27.5 million settlement with
Universal Health Services Inc., a company based in Pennsylvania that owns
South Texas Health System and other hospitals around the country.[Source:
USDOJ 10/30/09]

The one physician owned hospital in McAllen, Texas, Doctors Hospital at
Renaissance, was never part of the DOJ investigation and no allegations have
ever been brought against the facility.

"Our opposition has attempted to pass the blame to physician owned hospitals
for cost concerns brought to light by a June 2009 article published in the New
Yorker. As the DOJ settlement demonstrates, that is simply not the case. The
problem has never been physician ownership. The real problem lies with big
corporate hospital chains," said Molly Sandvig, JD Executive Director of
Physician Hospitals of America (PHA).

Despite this and other convincing evidence that points away from physician
ownership as a concern, language that attacks physician ownership has been
inserted by corporate hospital lobbyists in both the House and Senate versions
of health care reform bills.

"Congress is about to be railroaded into punishing innocent physicians who
have been trying to bring reform to hospitals by the same type of big hospital
corporations that were finally caught in McAllen, Texas," says Sandvig.

The Justice Department announcement specifically noted that the settlement,
"...involved allegations that the defendants had entered into financial
relationships with several doctors in McAllen in order to induce them to refer
patients to the defendants' hospitals. The government alleged that these
payments were disguised through a series of sham contracts, including medical
directorships and lease agreements."

Sandvig commented that PHA is pleased to see that the real problem has been
identified. "We have said for many years that we share concerns about illegal
kickback schemes and that enforcement must be targeted to protect Medicare and
tax money," commented Sandvig."

"At PHA, the patient and his or her medical needs are our top priority,"
stated Sandvig. "Therefore, it is truly disheartening to see such
inappropriate self-referral stemming from employment incentives created
between employed physicians and hospitals systems. We fear the employment
relationship leads to this behavior far too often".

_________________________________
Physician Hospitals of America (PHA) represents over 220 American hospitals
owned and operated by physicians themselves. PHA is on the web at:
www.physicianhospitals.org

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SOURCE Physician Hospitals of America

Molly Sandvig, Executive Director of Physician's Hospitals of America,
+1-605-321-3483