Oroville Hospital has agreed to a $10.25 million settlement with the United States and the State of California over allegations of violating the False Claims Act and the Anti-Kickback Statute. The announcement was made by U.S. Attorney Phillip A. Talbert.

The allegations against Oroville Hospital include engaging in an illegal kickback scheme by paying physicians for patient admissions, submitting false claims to Medicare and Medi-Cal for unnecessary hospital admissions, and using false diagnosis codes. The hospital will pay $9,518,954 to the federal government and $731,046 to California.

U.S. Attorney Talbert stated, “Physicians should make decisions based on the best interests of their patients, not their own personal financial interests.” He emphasized that hospitals involved in such schemes undermine community trust and distort healthcare decisions.

Principal Deputy Assistant Attorney General Brian M. Boynton commented on improper billing practices: “Improperly billing federal health care programs depletes valuable government resources used to provide medical care to millions of Americans.”

The settlement also addresses claims that Oroville Hospital incentivized physicians with bonuses based on patient admissions and submitted costly inpatient care claims when it was not necessary. Additionally, there were allegations of using false diagnosis codes for systemic inflammatory response syndrome (SIRS) leading to excessive reimbursements.

As part of the agreement, Oroville Hospital entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). This includes implementing a risk assessment process and having an independent review organization assess select Medicare claims annually.

The civil settlement resolves claims brought under the qui tam provisions by whistleblower Cecilia Guardiola in a case titled United States ex rel. Cecilia Guardiola v. Oroville Hosp., Case No. 2:20-CV-1558 (E.D. Cal.). Ms. Guardiola will receive approximately $1.8 million from this settlement.

Assistant U.S. Attorney Steve Tennyson managed the case for the U.S. Attorney’s Office, with coordination from several governmental departments including HHS-OIG and California's Division of Medi-Cal Fraud and Elder Abuse.

It is important to note that these resolved claims are only allegations without any determination of liability.