Sunday, January 29, 2006

Roger Williams Medical Center Agrees to Deferred Prosecution Agreement

The Roger Williams Medical Center in Providence, Rhode Island, entered into a deferred prosecution agreement (document available below) with the U.S. Attorney's Office to settle corruption charges.  The hospital was charged, along with its former CEO and two officers (one of whom worked for a subsidiary), with funneling money to a Rhode Island state Senator to protect its interests by disguising the source and reason for the payments.  The state Senator, John Celona, has already entered a guilty plea, and the hospital originally asserted that it was not guilty.  Since the indictment in early January, however, pressure has grown to settle the case (see earlier post here), and the hospital terminated the indicted CEO and resumed negotiations with federal prosecutors that resulted in the deferred prosecution agreement.

Under the agreement, the Medical Center admits that its officers engaged in criminal conduct, and agreed to cooperate in the government's prosecution.  The hospital also agreed to provide $4 million in free health care to the poor over and above what it already provides over the next two years.  The free health care is the substitute for a fine that a for-profit corporation would be expected to pay as part of a deferred prosecution agreement. Similar to other such agreements, the Medical Center will waive its work product protection and the attorney-client privilege related to the underlying conduct, and appoint an ethics compliance officer to ensure proper procedures are followed.  For the hospital, in addition to getting out from under the criminal charges, the Department of Justice also agreed not to recommend that it be debarred from federal health care programs (Medicare and Medicaid) for its conduct.  The Medical Center is already the subject of a Corporate Integrity Agreement with the Department of Health and Human Services, and if the current charges had triggered a debarment from the federal health programs, that would likely cause it to shut down.  A Providence Journal story (here) discusses the deferred prosecution agreement. (ph -- thanks to a Rhode Island reader for passing along the deferred prosecution agreement)

Download roger_williams_deferred_sentence_agreement.pdf

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Thanks for the update on this fascinating story. Interesting that the $4M in "free" care will be measured on a "cost" basis, as this should be lower than the hospital's normal fee schedule for services, thus enhancing the punative effect.

Posted by: DJ | Jan 30, 2006 2:20:07 PM

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