Detroit Medical Center to pay $30 million penalty

By Ed White

Associated Press

DETROIT (AP) -- The federal government says Detroit Medical Center has agreed to pay $30 million after administrators discovered improper financial perks for some physicians, including compensation, entertainment tickets and unreasonable rents.

The Justice Department said last Thursday the discovery was made as Detroit Medical Center was preparing itself for sale to Vanguard Health Systems.

The government says there were lease deals and independent contractor relationships that were not in writing or conflicted with fair market value. Assistant Attorney General Tony West says improper financial deals "can corrupt a physician's judgment."

Detroit Medical Center chief executive Mike Duggan says "many processes and record-keeping were sloppy." He says there's no suggestion that DMC paid a doctor to influence referrals.

Duggan says the DMC's sale to Vanguard "would have been dead" without a settlement this week.

Published: Mon, Jan 3, 2011