BUTTE, Mont. -

 St. James Healthcare in Butte has agreed to pay $3.85 million to resolve allegations that the hospital improperly provided financial benefits to a group of physicians that referred patients covered by Medicaid and other government health care programs to the hospital.

St. James CEO Chuck Wright tells The Montana Standard the hospital reported the violations, which occurred in 2005, after an internal compliance review that took place in 2009. Wright became CEO in early 2009.

The Department of Justice said Tuesday the physicians group paid below-market lease rates for a medical office building located on the hospital campus. Hospital officials would not identify the physician group.

The fine settles allegations that the hospital violated a law that restricts the financial relationships that hospitals can have with physicians who refer patients to them.