, Corbin, KY

Local News

January 29, 2014

Hospital must pay $16.5 million

Saint Joseph London has 5 business days to come up with settlement in civil lawsuit

CORBIN — By John L. Ross / Staff Writer

Five business days — that’s how long Saint Joseph London has to pay a $16.5 million settlement in a civil lawsuit claiming the hospital had an “improper financial relationship” with three doctors affiliated with Cumberland Clinic, according to a settlement agreement.

That relationship, according to the lawsuit, led to patients receiving unnecessary, invasive cardiac procedures — and led the hospital to bill Medicare and Medicaid for those unnecessary procedures.

“We all rely on health care providers to make treatment decisions based on clinical not financial, considerations,” said U.S. Attorney Kerry B. Harvey. “The conduct alleged in this case violates that fundamental trust and squanders scarce public resources set aside for  legitimate health care needs.”

It all began when three Lexington cardiologists took on the role of whistleblower when they filed a complaint “pursuant to the qui tam provisions of the False Claims Act,” according to Harvey.

Those three doctors, Michael Jones, Paula Hollingsworth and Michael Rukavina, will receive nearly $2.5 million of the settlement monies after bringing the fraud claims to the attention of government officials.

“We will use every available tool to protect our federal healthcare programs and the patients who they serve,” Harvey said.

According to the settlement agreement, the U.S. Government contends that from Jan. 1, 2008 through Aug. 31, 2011, several doctors working at the hospital performed numerous invasive cardiac procedures on Medicare and Medicaid patients who did not need them. Further, the hospital then billed the federal programs for these unnecessary procedures, which include coronary stents, pacemakers, coronary artery bypass graft surgeries, and diagnostic catheterizations.

The claims seeking reimbursement allegedly violated the False Claims Act because under federal law, Medicare and Medicaid programs only reimburse health care providers for operations that are deemed medically necessary. Hospitals generally receive between $10,000 and $15,000 for medical procedures such as heart stents.

In addition, the three whistleblowers alleged that Saint Joseph London paid kickbacks to defendants Dr. Satyabrata Chatterjee, Dr. Ashwini Anand, and/or clinics owned or operated by Chatterjee and Anand under the guise of professional service agreements, according to the settlement agreement.

These doctors were affiliated with Cumberland Clinic, a physician group that entered an exclusive arrangement with Saint Joseph in 2008 to provide cardiology services to their patients.

The settlement also resolves allegations that Saint Joseph violated the federal Stark Law and Anti-Kickback Statute by entering into sham management agreements with doctors at the Cumberland Clinic. These agreements served as an inducement for the doctors to refer patients to Saint Joseph.

Medicare and Medicaid, according to the agreement, are not liable for payment for those unnecessary cardiac procedures.

In connection with this settlement, Saint Joseph has agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services, Office of Inspector General, which obligates the hospital to undertake substantial internal compliance reforms and 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 Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “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.”

According to a press release from Saint Joseph’s, none of the doctors named in this case practice at the hospital any more.

With this agreement, and without admission of any violation of the law, the hospital can now move forward.

“We are committed to providing the communities we serve with safe,high quality health care performed with the highest of integrity,” said Greg Gerard, president of Saint Joseph London. “We are pleased to have reached this agreement so that we can move forward.”

Concerning the five-year Corporate Integrity Agreement, the hospital has already implemented a number of the activities outlined in the document, according to the statement released from the hospital.

“We will continue to collaborate with the Department of Health and Human Services as it follows our work in the coming years,” Gerard said. “The past few years have demonstrated the resilience and commitment of the team at Saint Joseph London. Now that this chapter has closed, we are eager to move forward.”

In the past year, Saint Joseph London has established a new leadership team, including Gerard, as well as Chief Medical Officer Shelley Stanko, M.D., Chief Financial Officer Christy Spitser and Chief Nursing Officer Chris Schweighardt. In addition, a Corporate Responsibility Officer is now on staff at the hospital.

This agreement represents the second largest health care fraud settlement in the 67-county Eastern District of Kentucky.

Before the three whistleblowers filed their complaint, Saint Joseph voluntarily disclosed to the government that one of its cardiologists, Dr. Sandesh Patil, had performed medically unnecessary coronary stents. Patil previously pleaded guilty to a federal health care fraud offense and received a two-and-a-half year sentence.

“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Stuart Delery, Assistant Attorney General for the Civil Division of the U.S. Department of Justice. “The Department of Justice will not tolerate those who abuse the public health care programs to which we all contribute and on which we all (rely on).”

The filed complaints really launched the investigation, according to Harvey’s press release.

“The criminal investigation and civil settlements are excellent examples of the importance of whistleblower complaints,” said Perry K. Turner, Special Agent in Charge of the FBI in Kentucky. “This result would not be possible without the commitment of private citizens exposing this type of egregious fraud.”

The state of Kentucky also receives a portion of the $16.5 million settlement — approximately $365,851, which represents the state’s share of the government’s recovery of Medicaid funds. The Medicaid program is funded jointly by the federal and state.

“I applaud the hard work of my Medicaid Fraud Unit and all of the agencies involved in this case,” said Kentucky Attorney General Jack Conway. “I am pleased that we have reached this settlement and are recovering thousands of dollars for a vital state program and for taxpayers.”

While the settlement involving Saint Joseph London ends the hospital’s involvement — it doesn’t mean the investigation is over, including the criminal investigation.

The U.S. Government will intervene in the case initiated by the three Lexington doctors and continue litigating allegations of False Claims Act violations arising out of unnecessary cardiac procedures against most of the other defendants named in the qui tam.

The investigation was conducted by the FBI, HHS-OIG, Kentucky Office of Attorney General, Medicaid Fraud and Abuse Control Unit, the Civil Frauds Section of the Department of Justice in Washington, D.C., and the U.S. Attorney’s Office.

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