Hospital reaches settlement; terms under seal

Kalispell Regional Healthcare has officially reached a settlement in the whistleblower lawsuit brought by the former chief financial officer of its Physician Network, ending a federal investigation into its compensation and referral practices, according to a notice published Wednesday in U.S. District Court in Missoula.

The exact settlement and documents pertaining to the case remain under seal, at the request of the government’s attorneys. In a mandatory response brief submitted Wednesday afternoon, the government’s attorneys requested that documents pertaining to 12 motions or briefs in the case remain private “because they discuss the United States’ investigative and settlement processes.” The government expressly requested that at a minimum, three particular motions to extend the seal for the government’s investigation and settlement process — from Nov. 2016, Feb. 2017 and July of this year — remain under seal. These documents were filed in private as part of the False Claims Act, and thus “should remain under seal and not be made publicly available,” according to the government.

It is unclear what percentage of the case’s documents these redacted entries represent, or if U.S. District Judge Donald W. Molloy would order them to be unsealed.

Earlier Wednesday, Molloy’s court dismissed with prejudice a whistleblower lawsuit brought by Jon Mohatt, the former CFO of Kalispell Regional’s Physician Network, which was filed in September 2017. The lawsuit alleged that Kalispell Regional knowingly violated federal anti-kickback and compensation statutes dating back to at least 2011, under its late Chief Executive Officer Velinda Stevens. The potential violations included paying certain physicians at rates far above fair market value and incentivizing staff to engage in a lucrative scheme of self-referrals.

The hospital has maintained it did not participate in any wrongdoing. It has also previously stated that it set aside $21.5 million in advance of a potential settlement.

According to Wednesday’s court notice, the court declines to “retain jurisdiction over enforcement of the parties’ settlement agreement.”