Hospital Operator to Pay $16.5 Million in Settlement Over Unnecessary Cardiac Procedures

The DOJ has reached a $16.5 million settlement with Saint Joseph Health System Inc., an operator of hospitals in Kentucky, resolving allegations that it’s Saint Joseph Hospital submitted false claims to Medicare and state Medicaid programs in violation of the False Claims Act. The company, based in London, Ky. and the operation of several hospitals in the state including Saint Joseph Hospital, allegedly submitted the claims for various cardiac procedures that were not medically necessary.

According to the complaint, many medically unnecessary invasive cardiac procedures, of which the Saint Joseph Hospital was aware, were performed by doctors on patients on Medicare and Medicaid. The procedures included diagnostic catheterizations, coronary artery bypass graft surgeries, coronary stents, and pacemakers.

The doctors who performed these procedures were part of a physician group called Cumberland Clinic that had an exclusive contract with Saint Joseph Hospital since 2008 to provide cardiology services. The group is owned by Satyabrata Chatterjee and Ashwini Anand, two cardiologists based in London, Ky.

The suit also alleged that Saint Joseph Hospital had entered into sham management agreements with Chatterjee and Anand that benefited the two financially in exchange for referrals to the hospital from Cumberland Clinic. This amounted to a violation of the Anti-Kickback Statute and the federal Stark Law according to the DOJ. The settlement resolved these allegations as well.

One of the cardiologists from the Cumberland Clinic who performed many of the medically unnecessary procedures at the hospital, Dr. Sandesh Patil, faced federal criminal charges related to this suit. Patil plead guilty to a federal health care fraud charge and was sentenced to 30 months prison time.

Another aspect of the settlement involves Saint Joseph Hospital’s agreement to make structural changes to prevent further unlawful activity. A Corporate Integrity Agreement will be reached between the hospital and the Department of Health and Human Services (HHS) Office of Inspector General. The agreement requires the hospital to implement compliance reforms internally and have a third-party review claims it makes to federal health programs over the next five years.

The DOJ will also intervene in a False Claims Act suit against Anand and Chatterjee for their involvement in the referral scheme, as well as the Cumberland Clinic and another practice group owned by the pair prior to forming Cumberland.

This settlement resolves a dispute initially filed by three whistleblowers under the False Claims Acts’ qui tam provisions, allowing private citizens with knowledge of wrongdoing to step forward and sue on behalf of the government. The whistleblowers, Drs. Michael Jones, Michael Rukavina, and Paula Hollingsworth, cardiologists based out of Lexington, Ky., are entitled to share in the reward as permitted by the statute. Out of the total $16.5 million settlement, the three will share $2.46 million.

The DOJ has secured more than $12.2 billion in health care fraud claims since January 2009, part of a total of $17.1 billion recovered in False Claims Act cases in that period. This case is another significant achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a federal initiative launched in May 2009 as a joint effort between HHS and the DOJ.

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