An Iowa hospital has agreed to a $4.5 million settlement with the U.S. Attorney's Office to resolve allegations that it violated the Stark Law by overpaying 5 medical specialists.

Federal prosecutors had accused Covenant Medical Center in Waterloo of paying salaries "far above fair market value" to 5 physicians Ñ#151; identified as neurosurgeons, orthopedic surgeons and gastroenterologists — who referred cases to the center. According to a report in the Des Moines Register, critics had accused Covenant of paying at least 2 doctors more than $2 million a year.

"These physicians were among the highest paid hospital-employed physicians not just in Iowa, but in the entire United States," according to the Department of Justice. Prosecutors did not identify the doctors by name and did not file any charges in the case.

Covenant has not admitted wrongdoing, but agreed to settle "to avoid the uncertainty of litigation, disruption and high expense associated with protracted litigation with the government, despite our firm belief that Covenant's compensation to its physicians was reasonable and fell within fair market value," said hospital officials in a press release. Covenant leaders told the Register the specialists had earned their compensation by working long, hard hours.

Irene Tsikitas

The Centers for Disease Control and Prevention is set to distribute $40 million in federal funds to state health departments to help reduce healthcare-associated infections.

The CDC's funding focuses on controlling bloodstream infections, surgical site infections and catheter-associated urinary tract infections. Specifically, the agency wants state health departments to increase investments in the U.S. Department of Health and Human Services' HAI Action Plan, which is designed to create widespread infection prevention practices by coordinating the efforts of local public and private partners.

The $40 million investment, funded by the American Recovery and Reinvestment Act, marks the first time Congress has allocated money to curb healthcare infection rates at the state level. Part of the funding is earmarked to increase healthcare facilities' use of the CDC's National Healthcare Safety Network, a surveillance system that tracks, analyzes and compares HAI data. Funds will also go toward the hiring and training of local public health staff to implement and coordinate national infection prevention efforts.

"We expect these programs to strengthen tracking and prevention of healthcare-associated infections, enhance facility accountability, provide data for informed policy, and ultimately save lives," says CDC Director Thomas R. Frieden, MD, MPH. "Funding critical prevention efforts at state and local levels represents a significant investment toward elimination of HAIs and improved patient safety."

Daniel Cook

When a physician discloses a medical error and apologizes for it, what the patient believes the physician is saying is more important for maintaining trust than what the physician actually says, according to a new study.

Still, a heartfelt apology only slightly reduces a physician's chance of getting sued for the error, says the study published in the September issue of the Journal of General Internal Medicine.

Researchers at Johns Hopkins Bloomberg School of Public Health in Baltimore, Md., and the University of Florida showed volunteers videos of actors portraying physicians apologizing after medical mistakes; some gave a full apology and took full responsibility, while others offered a non-specific or non-apology without accepting blame.

"When viewers thought that the doctor had apologized and taken responsibility, they gave the doctors much higher ratings," says author Albert Wu, MD, MPH, a professor at Johns Hopkins, in a press release. About 81% of viewers said they still trusted the physician and 56% said they would still refer the physician after the apology, says Dr. Wu. "However, despite the positive reaction to perceived apology or responsibility, viewers were only slightly less inclined to want to sue."

Kent Steinriede

Is your staff getting a cost-of-living raise next year or will the economy cause you to be cautious with staff salaries? Go to our home page to take this week's InstaPoll and to see real-time results. We'll report the results in this space next week.

The overwhelming majority (88%) of the 185 facility managers who answered last week's poll are so-called "working managers" — meaning they spend a good deal of time working cases in the OR and helping out where needed. Only 12% said they spend most of their days in an office.

Dan O'Connor