Erlanger, Heart Institute under federal scrutiny

Erlanger, Heart Institute under federal scrutiny

October 15th, 2011 by Chris Carroll in News

Erlanger Hospital is located on 3rd Street in Chattanooga.

Photo by Angela Lewis/Times Free Press.

Erlanger Health System officials confirmed Friday they are expecting a subpoena from the U.S. Department of Health and Human Services Office of Inspector General regarding contracts with the Chattanooga Heart Institute.

Doug Fisher, Erlanger's vice president of government and corporate affairs, confirmed the subpoena request in a written statement to the Chattanooga Times Free Press.

"We have little information about this situation but do believe it dates back several years," he said. "The administration has taken very extensive and expensive measures in the compliance area in recent years, and we are very confident that steps are in place to assure that our contracts follow all legal requirements."

Doug Fisher of Erlanger

Beyond that, federal and hospital officials were not forthcoming. Donald White, a spokesman for the Department of Health and Human Services Office of the Inspector General, declined to discuss details.

"As a matter of investigative procedure, we can neither confirm nor deny operations that may be pending before the agency," he said.

In 2009, Erlanger signed an agreement with Chattanooga Heart Institute, a subsidiary of its main competitor, Memorial Hospital, whose officials declined comment.

The contracts totaled $1.6 million annually to provide 24-7 on-call coverage and interpretation of cardiac test results. Some Erlanger trustees had expressed concern about the cost of the contracts, according to newspaper archives.

Before the agreement, Erlanger struggled to hire cardiologists, blaming the problem on what one official called two "burdensome" factors -- its mission to treat indigent patients and a high number of emergency calls.

It's not the first time federal authorities have looked into Erlanger. In a 2005 settlement that sapped hospital reserves, Erlanger paid $40 million to the U.S. Department of Justice amid allegations that hospital officials violated anti-kickback statutes.

The agreement alleged the hospital overpaid physicians and offered them improper incentives in exchange for referrals to Erlanger. According to the settlement, Erlanger denied the government's allegations.

The 2003 subpoena behind that investigation asked for Erlanger documents dating back to January 1995 and demanded copies of contracts between the hospital and dozens of physicians, records documenting the hours doctors work, minutes of board meetings and conflict of interest disclosure statements, according to newspaper archives.

"Anytime we receive requests for information from the federal government, we are always ready to comply and look forward to resolutions to their questions," Fisher said.

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