Cooper Health System in Camden has agreed to a $12.6 million joint state-federal settlement that resolves allegations the hospital entered into improper consulting and compensation agreements with physicians as it sought to build its cardiology program,  Executive Assistant Attorney General John Hoffman and U.S. Attorney Paul Fishman announced today.

Entered today in federal court, a Consent Order outlining the settlement calls for Cooper to pay the federal government approximately $10.2 million, and the State $2.3 million.  In addition to the monetary terms, Cooper has agreed to a number of corporate reforms designed to enhance accountability, training, and other aspects of its operations. Cooper also has agreed to a self-reporting arrangement – reporting to both the Attorney General’s Office and the U.S. Attorney’s Office -- to ensure compliance with the settlement.

“Cooper has taken responsibility for its past misconduct,” said Executive Assistant Attorney General Hoffman. Attorney General Jeffrey S. Chiesa is recused from the Cooper matter.

“We commend Cooper for implementing substantial internal reforms and accountability measures designed to address the government's concerns and avoid any future transgressions,” Hoffman said.

“Payments to outside physicians by hospitals require heightened scrutiny because those payments may be improper if they are based on patient referrals,” said U.S. Attorney Fishman. “Such kickback arrangements interfere with the physician-patient relationship and can lead to problems of overutilization and increased costs. Federal health care participants, such as Cooper, who run afoul of the prohibitions against kickbacks must be held responsible.” 

The settlement announced today resolves a joint, federal-state investigation into    financial relationships involving the Cooper Heart Institute in Camden, the Cooper Heart Institute Advisory Board and doctors who served on the Advisory Board.

The investigation focused on the method by which general practice physicians  who served on the Heart Institute Advisory Board were compensated, and the services they provided Cooper in return.

The investigation included allegations that Cooper engaged in a practice  whereby physicians who were members of the Advisory Board ostensibly were being paid for their advice but, in reality, were being paid to refer their patients to Cooper’s Heart Institute for treatment.

The investigation also uncovered facts that Cooper sought – and received -- reimbursement through Medicare/Medicaid for treating such inappropriately referred patients, in violation of state and federal law.

Samuel Scott Cornish, a Section Chief within the Division of Law’s Affirmative Civil Enforcement Section, handled the matter on behalf of the State, along with Deputy Attorneys General Michelle T. Weiner and Lisa D. Kutlin, who are both members of the Division of Law’s Government and Healthcare Fraud Section.

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