Kalispell Regional Healthcare Settles Whistleblower Case

Kalispell Regional Healthcare has reached a much-anticipated settlement with the Department of Justice in a whistleblower lawsuit alleging its physicians received illegal compensation in exchange for patient referrals to in-house services, according to a federal court order filed Wednesday.

The order, submitted by U.S. District Judge Donald Molloy, dismisses the case with prejudice — meaning it is permanently dismissed and cannot be brought back to court — and instructs government attorneys to show cause why the terms of the agreement should not be unsealed in their entirety.

Molloy ordered counsel to respond by 5 p.m. on Sept. 26.

Assistant U.S. Attorney Megan Dishong responded with a brief requesting that the court unseal the details of the settlement actions, with the exception of 12 pleadings related to the government’s decision on whether or not to intervene. The majority of those motions were requests for time extensions in a case that has dragged on for more than two years.

Molloy is expected to unseal the documents detailing the settlement soon.

The settlement is the latest chapter in a tumultuous saga for KRH, which has disputed the allegations detailed in a complaint filed by the hospital’s former physician network chief financial officer while enduring a federal investigation into allegations of widespread institutional fraud.