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November 21--  In the aftermath of a multi-million dollar settlement with the federal and state governments, Meadows Regional Medical Center CEO Alan Kent says he is disappointed, but it will not impact the hospital's ability to serve the community.

"I'm very disappointed and we accept the responsibility for not having met some of the government standings in their review," Kent admitted.

"This is about contractual relationships between the hospital and a handful of physicians over a period years.  This is not going to have an impact which is going to cause us to sell the hospital or layoff employees.  We are committed to continue to move forward and do the mission oriented work that we have always been able to do," he said.

The government announced a settlement of up to $12,875,000 contending that Meadows submitted claims referred by physicians who were being overpaid by Meadows and that the arrangement violated federal law and the Anti-Kickback Statute.  Federal officials said reimbursements to hospitals should be based on a patient's best interest and not the financial interests of its doctors.

Regarding compensation paid to doctors, Kent says, "It really comes down to a matter of fair market value.  Just like in the appraisal of a home, there might be more than one opinion about that number, fair market value is a range. Going forward we have already instituted a number of better practices that will help us create a better definition of fair market value.  This will let us run the organization at a higher degree of compliance and structure that will meet the expectations of the federal government, the state government or anyone else who would review our contracts."

Part of the settlement requires Meadows to enter into what's called a "corporate integrity agreement" giving the government more oversight regarding compensation and other management decisions.

Meanwhile the hospital has five years to pay the government, "We're making an initial payment, but the government has allowed us to structure this over time so we don't have to write a check for all of this at once.  Also, part of the settlement is contingent on our hospital's performance over the next five years," Kent said.