Letter To The
Community From Dr. Rob Mackenzie, President & CEO, Cayuga Medical Center
purpose of my letter is to make you aware of a compliance issue and related
governmental settlement associated with several physician contracts and
recruitment agreements at Cayuga Medical Center. I would like to first provide
you some background information that will be helpful to understand this complex
Medical Center often helps recruit new physicians to the Ithaca area, and
offers loans to help them start in private practice. We forgive those loans in
return for the physicians’ commitment to continue to practice in our community.
Government regulations tell us what we can and cannot do to assist new physicians.
2004, a change was made in one of these many regulations, indicating that loans
to physicians joining an existing practice could no longer include any portion
of that practice’s overhead, unless new space or staff was added. All contracts entered into after this change
were and continue to be compliant.
However, the government did not “grandfather” prior recruitment contracts.
2007, we discovered that four recruitment contracts signed prior to 2004 had
not been corrected, due to our administrative oversight. This oversight was discovered through our
internal compliance program, which helps make sure we are always doing the
right thing at CMC. Once we discovered our oversight, we immediately self-reported
it to the Office of Inspector General (OIG).
the course of their investigation, the OIG discovered two additional physician
contracts that they believe were also out of compliance. We, along with our
legal counsel, disagree with their interpretation of these additional two
to avoid a lengthy legal proceeding, high legal costs, and to do what is in the
best interest of Cayuga Medical Center, we have decided to settle this matter with
the Office of Inspector General for $3.5 million. We have previously set aside
sufficient funds to cover this expense, so that this issue does not impact
current medical center operations. The physicians we recruited have done
nothing wrong, and are not required to pay any money back.
situation did not involve the delivery of health care services to our community.
Neither was there any finding of fraud and abuse. Indeed,
the Federal Government has praised the medical center and its staff for self
reporting the compliance issue to them and for being cooperative throughout
Medical Center always strives to do the right thing in a very complex
regulatory environment that is always changing. We take our responsibility of
being stewards of taxpayer funded programs very seriously and believe our
internal controls are comprehensive.
you have any questions or comments, please email me at