December is off to a rocky start for two former hospital CFOs who have agreed to pay a significant amount in legal settlements over the last week.
As part of a plea agreement, Alan Germany, former CFO of Health Care Conglomerate Associates, wrote an apology letter and paid $150,000 in restitution in connection to charges of embezzlement, conflict of interest and using an official position for personal gain.
Of the amount paid, $100,000 will go to Tulare (Calif.) Local Healthcare District, which HCCA managed. Additionally, Mr. Germany served as acting CFO of Tulare Regional Medical Center and Southern Inyo Hospital in Lone Pine, Calif. The final $50,000 will go to the Southern Inyo Healthcare District, where Mr. Germany served as chief restructuring officer at Inyo Hospital, which also had an HCCA management agreement.
Two years of probation and 540 hours of community service are also required for Mr. Germany on top of the apology letter and restitution payments. He will serve six months in prison if his probation is violated.
In Rockdale, Texas, Peggy Borgfeld, the former controller, CFO and COO of critical access hospital Little River Healthcare, split a payment of $880,199 with three physicians to resolve False Claims Act allegations, including alleged Anti-Kickback Statute violations.
Accused of submitting false claims to Medicare, Medicaid and Tricare, Ms. Borgfeld allegedly knew that the hospital paid recruiter commissions to those who used management service organizations to pay physicians kickbacks for referring their laboratory tests to Little River. Per the allegations, Ms. Borgfeld knowingly signed false certifications in Medicare cost reports regarding the hospital's compliance with the Anti-Kickback Statute.
Along with a five-year exclusion from federal healthcare program participation, Ms. Borgfeld will pay $325,000 plus additional contingent payments in her part to settle the allegations.