Image by pasja1000 from PixabayMercy Medical Center has agreed to pay a $14.8 million fine for allegedly providing financial benefits to an investment company that holds a stake in the hospital’s ambulatory surgery center (ASC).
The U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) said the Cedar Rapids, Iowa-based Mercy Medical Center self-disclosed its violation of the Civil Monetary Penalties Law.
OIG alleged that the Catholic hospital paid “fees and expenses identified in the Management Services Agreement between the hospital and the ambulatory surgical center that the investment company owes but has not paid.” It also alleged that Mercy Medical Center made “distributions made to the investment company and its owners that, according to the ambulatory surgery center operating agreement, should not have been paid.”
The Mercy Surgery Center in Hiawatha, Iowa, specializes in orthopedic, ophthalmologic and podiatry outpatient procedures.
In a statement to Ambulatory Surgery Center News, a spokesperson for Mercy Medical Center said it “immediately conducted a thorough internal review” and submitted a report to the HHS OIG after it uncovered an issue related to the fees and expenses for its ASC.
“Mercy has since made the required changes to resolve the matter to ensure compliance with federal regulatory guidelines,” the spokesperson said.
The spokesperson also noted that “the funds used for the settlement were not taken from our operating budget or donor contributions, meaning there is no impact on patient care, staffing, or day-to-day operations. The settlement is being paid from investments.”
According to a patient-facing document from the Mercy Surgery Center, the facility is co-owned by PCI MMC Surgery Center Investment Company, LLC. Mercy Medical Center did not respond to a request from ASC News seeking to confirm that ownership arrangement.
