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California Health System to Pay $31.5M for False Claims Act Violations

Community Health System and its affiliate Physician Network Advantage Inc. have agreed to pay $31.5 million to the United States to resolve allegations that they violated the False Claims Act based on financial benefits provided to referring physicians. Community Health System operates in Fresno County and includes hospitals Community Regional Medical Center and Clovis Community Medical Center. The civil settlement resolves allegations that Community Health System and Physician Network Advantage Inc. (PNA) provided several types of extravagant benefits to induce physicians in the Fresno area to refer their patients to Community facilities for medical services, in violation of the False Claims Act. PNA is a healthcare technology business formed and funded by Community to support Fresno-area physicians’ adoption of the electronic health records platform used by Community. The United States contends that PNA also played a key role in securing business for Community by unlawful means. In a custom-built lounge located on premises at PNA’s offices, known as HQ2, PNA provided expensive wine, liquor, cigars, and meals to referring physicians, with the knowledge and funding of Community.