Baltimore hospital settles with govt over dealings with cardiology group

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St. Joseph Medical Center in Towson, Md., near Baltimore, has reached an agreement with the federal government to settle claims that may arise during an investigation of a cardiology group with which the hospital has done business.

U.S. Attorney for the District of Maryland Rod J. Rosenstein has forwarded the agreement to the Department of Justice and other federal agencies for final approval, which could take several months.

In February, the U.S. Department of Health and Human Services' (HHS) Office of Inspector General (OIG) asked the hospital to hand over medical records related to MidAtlantic Cardiovascular Associates. MidAtlantic is a 53-doctor cardiology group in Greater Baltimore. When the federal investigation began, the hospital's CEO, John K. Tolmie, and two other top executives resigned. St. Joseph is an affiliate of Denver's Catholic Health Initiative, which generates $8 billion in revenue annually.

The 354-bed hospital said it reached the agreement without admitting liability to avoid the expense of litigation. St. Joseph also did not disclose the terms of the settlement but said that the government will release the details of the agreement within a few months.

The Baltimore Sun reported that the relationship between the hospital and MidAtlantic has been a contentious one, spawning several lawsuits and allegations that decisions about patient care were sometimes guided by financial relationships between cardiologists and surgeons. As the dispute escalated, revenue from cardiac surgery at St. Joseph declined while revenue rose at rival Union Memorial Hospital, which was also issued a subpoena in the federal investigation.

Last year, St. Joseph hired two of MidAtlantic's top doctors, derailing the physician group's $25 million deal to be acquired by Union Memorial's parent company, MedStar Health, the Sun reported. In December  2008, St. Joseph opened a new cardiac catheterization suite under the direction of one of those physicians, Mark G. Midei, MD.

The hospital said it is initiating discussions with the OIG, concerning a corporate integrity agreement. The agreement is to ensure that all future conduct and activity complies with health regulations.