Payments to Iowa specialists draw HHS scrutiny

From Modern Physician

HHS' inspector general's office subpoenaed two health plans for information about payments to specialists at 281-bed Covenant Medical Center, Waterloo, Iowa.

Covenant Medical is part of three-hospital Covenant Health System. Chris Hyers, the system's vice president of business development, said the hospital had not received an investigative subpoena from the inspector general's office and declined to comment on the insurers' subpoenas because officials had not seen them. A spokeswoman for the inspector general's office confirmed that subpoenas were issued to John Deere Health, Moline, Ill., and Wellmark Blue Cross Blue Shield, Des Moines, Iowa, but declined further comment.

Earlier this year, local news reports questioned whether Covenant Medical's payments to a gastroenterologist and two orthopedic surgeons exceeded fair market value. The hospital paid a total of more than $5 million in compensation to the three physicians in both 2002 and 2003, while providing $1.9 million in charity care each year, according to IRS filings. Hyers said the compensation reflected how hard the physicians worked and a shortage of specialists in the area.

John Deere Health confirmed it had received a subpoena but declined to comment further. Wellmark declined to coment at all.