KENTUCKY HOSPITAL SETTLES ALLEGATIONS OF PERFORMING MEDICALLY UNNECESSARY CARDIAC PROCEDURES

FROM:  JUSTICE DEPARTMENT 
Wednesday, January 29, 2014
Kentucky Hospital Agrees to Pay Government $16.5 Million to Settle Allegations of Unnecessary Cardiac Procedures

Saint Joseph Health System Inc. has agreed to pay $16.5 million to resolve allegations that Saint Joseph Hospital violated the False Claims Act by submitting false claims to the Medicare and Kentucky Medicaid programs for a variety of medically unnecessary cardiac procedures, the Justice Department announced today.  Saint Joseph Health System operates numerous hospitals statewide, including Saint Joseph Hospital, which is based in London, Ky.

“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “ The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk.”

The government alleged that doctors working at Saint Joseph Hospital performed numerous invasive cardiac procedures, including coronary stents, pacemakers, coronary artery bypass graft surgeries and diagnostic catheterizations, on Medicare and Medicaid patients who did not need them, and that the hospital was aware of these unnecessary procedures.  These doctors were affiliated with Cumberland Clinic which is a physician group that entered an exclusive arrangement with Saint Joseph Hospital in 2008 to provide cardiology services to the hospital’s patients.  Cumberland Clinic is owned by two London-based cardiologists, Satyabrata Chatterjee and Ashwini Anand.

The settlement also resolves allegations that Saint Joseph Hospital violated the federal Stark Law and Anti-Kickback Statute by entering into sham management agreements that financially benefitted Chatterjee and Anand as an inducement for Chatterjee and Anand to direct more Cumberland Clinic patients to the hospital.

Dr. Sandesh Patil, one of the Cumberland Clinic cardiologists working at the hospital, performed many of the medically unnecessary coronary stents.  Patil has since pleaded guilty to a federal health care fraud offense and has been sentenced to serve 30 months in prison.

“We all rely on health care providers to make treatment decisions based on clinical, not financial, considerations,” said U.S. Attorney for the Eastern District of Kentucky Kerry Harvey.  “The conduct alleged in this case violates that fundamental trust and squanders scarce public resources set aside for legitimate health care needs.  We will use every available tool to protect our federal health care programs and the patients who they serve.”

In connection with this settlement, Saint Joseph Hospital has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General (HHS-OIG), which obligates the hospital to undertake substantial internal compliance reforms and to commit to a third-party review of its claims to federal health care programs for the next five years.

"Cases such as this threaten both the health of patients and the financial integrity of the Medicare and Medicaid programs," said Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta Derrick L. Jackson.  "This settlement is another example of the OIG’s commitment to protecting our beneficiaries and to recovering any money that has been improperly paid as a result of medically unnecessary procedures."

In addition to the settlement with Saint Joseph Health System, the government  announced its intervention in a lawsuit alleging False Claims Act violations by Chatterjee and Anand, who referred patients for and performed the unnecessary procedures and tests, and their practice group, Cumberland Clinic, as well the practice groups each of them owned before forming Cumberland Clinic.    

The government actions announced today stem in large part from a whistleblower complaint filed by three Lexington, Ky., cardiologists pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit.  The Act also permits the government to intervene in the lawsuit and take over the allegations as it has done in this case.  Drs. Michael Jones, Paula Hollingsworth and Michael Rukavina will receive a total of $2.46 million of the $16.5 million settlement with Saint Joseph Hospital.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $17.1 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The investigation was conducted by the FBI, HHS-OIG, the Kentucky Office of Attorney General, Medicaid Fraud and Abuse Control Unit, the Commercial Litigation Branch of the Department of Justice Civil Division and the U.S. Attorney’s Office for the Eastern District of Kentucky.  The claims settled by this agreement are allegations only, and there has been no determination of liability.

The lawsuit is captioned United States ex rel. Jones, Hollingsworth and Rukavina v. Saint Joseph Health System et al., no. 11-cv-81-GFVT (E.D.Ky.)

ARIZONA COMPANY TO PAY $10 MILLION TO RESOLVE FALSE CLAIMS ACT ALLEGATIONS

FROM:  U.S. DEPARTMENT OF JUSTICE
Monday, July 2, 2012
Arizona-based Nextcare Inc. to Pay US $10 Million to Resolve False Claims Act AllegationsAllegedly Charged for Unnecessary Testing and Inflated Billing for Urgent Care Medical Services
NextCare Inc., an Arizona-based company, has agreed to pay $10 million to settle federal and state allegations that it submitted false claims, the Justice Department announced today.  NextCare is an owner of a chain of urgent care facilities with locations in Arizona, Colorado, Texas, North Carolina, Ohio and Virginia.

The settlement resolves allegations that NextCare submitted false claims to Medicare, TRICARE and the Federal Employees Health Benefits Program, as well as the Medicaid programs of Colorado, Virginia, Texas, North Carolina and Arizona, by billing for unnecessary allergy, H1N1 virus and respiratory panel testing.   The United States also alleged that NextCare inflated billings for urgent care medical services in the years under review, a practice known as upcoding.

“This settlement demonstrates the Justice Department’s commitment to ensuring that federal health care dollars are spent appropriately,” said Stuart Delery, Acting Assistant Attorney General for the Civil Division. “Health care providers who administer unnecessary services or who overcharge for care will be held accountable.”

Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, noted that, “Today’s $10 million settlement with NextCare demonstrates our commitment to putting a stop to improper billing practices that exploit Medicare and drain vital resources from our health care system.   NextCare’s upcoding and unnecessary medical testing wasted taxpayers’ dollars.  This is a strong message to companies and individuals who engage in such conduct.   We are here, we are watching, and we will use all of our resources to safeguard the integrity of important public programs and protect consumers across the nation.”

Daniel R. Levinson, Inspector General of the Department of Health and Human Services (HHS-OIG), added, “P roviders who subject beneficiaries to unnecessary medical testing, as alleged against NextCare, compromise the well-being of their patients and squander Federal health care funds .”

As a condition of the settlement, NextCare Inc. is also required to enter into a Corporate Integrity Agreement with HHS-OIG under which the company will be monitored for a period of five years to ensure that in the future it complies with all federal healthcare program rules.

The allegations resolved by today’s settlement were initially raised in a lawsuit filed against NextCare by former NextCare employee Lorin Cohen.   Under the False Claims Act, private citizens acting as relators can bring suit on behalf of the United States and share in the recovery.  Ms. Cohen will receive $1.614 million as her share of the recovery.

This resolution is part of the government’s emphasis on combating health care fraud and another step forward for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, a collaborative effort launched in May 2009 by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services (HHS).  Settlements such as this one emphasize both the Department of Justice and HHS's commitment to the reduction and prevention of Medicare and Medicaid financial fraud.   Through the False Claims Act alone, the Justice Department has recovered more than $7.7 billion since January 2009 in cases involving fraud against federal health care programs.   The Justice Department's total recoveries in False Claims Act cases since January 2009 are over $11.3 billion.

This matter was handled jointly by the Civil Division of the United States Department of Justice, the U.S. Attorney’s Office for the Western District of North Carolina, the FBI, the North Carolina Attorney General’s Office, the Office of Inspector General of the Department of Health and Human Services (HHS-OIG), the TRICARE Management Activity and the Office of Personnel Management (OPM), which administers the FEHBP.   The claims settled by this agreement are allegations only, and there has been no determination of liability.