Hospital pays $16.5M to settle cardiologists’ fraud case

A hospital in Kentucky agreed to pay $16.5 million to settle claims that cardiologists improperly implanted cardiac devices and performed procedures on Medicare and Medicaid patients.

According to the whistleblower lawsuit, physicians at Saint Joseph London Hospital in London performed numerous unnecessary invasive cardiac procedures on Medicare and Medicaid patients between Jan. 1, 2008, and Aug. 31, 2011. The procedures included implanting coronary stents and pacemakers, CABG and diagnostic catheterizations.

The cardiologists were affiliated with Cumberland Clinic and provided services under an exclusive arrangement with Saint Joseph. They no longer practice at the hospital.

The hospital billed the federal government for the procedures, which the U.S. attorney’s office in Eastern District of Kentucky charged was in violation of the False Claims Act. One of the cardiologists, Sandesh Patil, MD, pleaded guilty to falsely recording the severity of patients’ illnesses in order to receive payments for medically unnecessary stenting. Patil was sentenced to 30 months in federal prison.

Three cardiologists—Michael Jones, MD, Paula Hollingsworth, MD, and Michael Rukavina, MD—initiated the lawsuit. They alleged that Patil, Ashwini Anand, MD, and Satyabrata Chatterjee, MD, as well as clinics and businesses owned and operated by them, carried out the scheme to defraud the government. The case also alleged that the hospital engaged in sham management agreements with Cumberland Clinic physicians and induced referrals.

Jones, Hollingsworth and Rukavina will receive almost $2.5 million of the $16.5 million settlement under qui tam provisions of the False Claims Act.

Saint Joseph London admitted no wrong doing. In a release, it said the hospital agreed to the settlement to avoid expenses and uncertainty of prolonged litigation. “We are pleased to have reached this agreement so that we can move forward,” Saint Joseph London President Greg Gerard said.

As part of the settlement, the hospital signed a five-year agreement to allow the Office of Inspector General to review its claims to federal health care programs and to undergo internal compliance reforms. Saint Joseph London said it already had implemented some elements of the agreement.

The U.S. attorney’s office said the $16.5 million deal is the second largest healthcare fraud settlement in the Eastern District of Kentucky.