MedStar Health Pays $35M to Settle 2 Healthcare Fraud Cases
In other healthcare fraud news, the US sues a West Virginal hospital over improper payments and Duke University pays $112.5 million to settle false claims allegations.
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By - MedStar Health Inc. and two affiliated hospitals recently agreed to pay $35 million to the federal government to resolve healthcare fraud cases that alleged the health system paid kickbacks in exchange for patient referrals.
The Department of Justice announced the settlement in an official press release on March 21, 2019.
“Kickbacks made in connection with the provision of medical services undermine the integrity of our healthcare system,” Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division stated in the press release. “We will take action against medical service providers who through unlawful conduct put their own financial interests ahead of the best interests of patients.”
According to the federal department, MedStar Health Inc. and Baltimore-based Medstar Union Memorial Hospital and MedStar Franklin Square Medical Center paid kickbacks to MidAtlantic Cardiovascular Associates (MACVA) from January 2006 to July 2011 under the guise of professional agreements.
But the payments were actually kickbacks in return for MACVA’s referrals to Union Memorial for “lucrative cardiovascular procedures,” the Department of Justice reported.
READ MORE: How Providers Can Detect, Prevent Healthcare Fraud and Abuse
MedStar Health also agreed to settle claims that it received Medicare reimbursement from 2006 to 2012 for medically unnecessary stents performed by Jong Wang, MD. Wang was a former MACVA employee who Medstar later employed.
The settlement resolves the lawsuit filed by three whistleblowers who practiced together at Cardiac Surgery Associates in Baltimore. The doctors filed the lawsuit in 2010 alleged that Union Memorial, Franklin Square Medical Center, and others violated the Anti-Kickback Act and False Claims Act by paying kickbacks for patient referrals and submitting Medicare claims for the cardiac procedures.
Medstar Health’s multi-million-dollar settlement will also resolve another lawsuit brought by former patients of Dr. Wang, the Department of Justice stated. They filed the lawsuit in 2012.
In an emailed statement, MedStar Health denied all wrongdoing.
“[W]e fully cooperated with the government’s investigation of these matters and ultimately determined that it was best to settle these matters in order to avoid protracted and distracting litigation,” a spokesperson recently told RevCycleIntelligence.com.
READ MORE: HHS: Physician Self-Referral Law Hinders Value-Based Care
“Importantly, the two cases have been settled without any findings of liability. MedStar has full confidence in our quality assurance and compliance programs, and we remain fully focused on advancing our patient care mission.”
US brings lawsuit against WV hospital, its CEO, and management company
The federal government recently filed a lawsuit against Wheeling Hospital Inc. in West Virginia after a whistleblower accused the hospital of paying kickbacks and other improper payments to physicians, the Department of Justice reported on March 25, 2019.
The complaint under the False Claims Act states that Wheeling Hospital violated the Stark Law and Anti-Kickback Statute, and the violations stemmed from R&V Associates Ltd., the hospital’s contracted management consultant, and Ronald Violo, the hospital’s CEO.
The Stark Law prohibits physician self-referral. In other words, the law forbids hospitals from billing Medicare for services referred by a physician if the physician, or an immediate family member, has a financial relationship with the hospital.
According to the Department of Justice, Wheeling Hospital violated the healthcare fraud law by compensating several employee and contracted physicians based on the volume or value of their referrals or the compensation exceeded fair market value for the services.
READ MORE: Strong Compliance Programs Key to Avoiding Healthcare Fraud
The hospital allegedly paid the illegal renumeration under the direction of R&V Associates and Violi.
Wheeling Hospital partnered with Pittsburgh-based R&V Associates in 2006 to improve the hospital’s financial performance, which had been suffering, the Pittsburgh Post-Gazette reported. The hospital had lost more than $55 million from 1998 and 2005.
The management consultant aimed to cast a wide net of physicians to capture patient referrals and gain a competitive advantage in the Ohio Valley market, the local news source explained. However, the consultant used kickbacks to accomplish the goals.
In response, Wheeling Hospital recently filed a federal lawsuit against the whistleblower Louis Longo, former Executive Vice President of Wheeling Hospital. The complaint claims Longo filed false claims against the hospital.
“As a Catholic hospital, we expect every member of our staff, as well as our partners, to conduct themselves with honor and integrity,” stated Bruce Archer, General Counsel for Wheeling Hospital. “We are pursuing action against Mr. Longo for his purported dishonest conduct, and we will vigorously defend our hospital and physicians against the fraudulent claims he filed against us.”
Duke University pays $112.5M to settle research misconduct allegations
A $112.5 million settlement between Duke University and the federal government resolves allegations that the university submitted applications and progress reports containing falsified research on federal grants to the National Institutes of Health (NIH) and the Environmental Protection Agency (EPA), the Department of Justice recently reported.
“The resources utilized by NIH and EPA to fund important research and clinical programs across the nation are limited,” Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division stated in the press release. “Today’s settlement demonstrates that the Department of Justice will pursue grantees that knowingly falsify research and undermine the integrity of federal funding decisions.”
According to the Department of Justice, the North Carolina-based private university knowingly submitted false claims to the NIH and EPA that contained falsified or fabricated data or statements in 30 grants. The agencies then paid the grant funds to the university.
Duke reportedly receives millions of dollars in funding from both NIH and EPA for hundreds of grants each year.
A former Duke employee first filed the complaint against the university in a whistleblower lawsuit.
Duke responded to the settlement announcement on March 25, 2019. The university stated that it discovered the possible research misconduct in 2013 after it fired a technician for embezzling money from the university.
“We expect Duke researchers to adhere always to the highest standards of integrity, and virtually all of them do that with great dedication,” Duke’s President Vincent E. Price said in the official statement. “When individuals fail to uphold those standards, and those who are aware of possible wrongdoing fail to report it, as happened in this case, we must accept responsibility, acknowledge that our processes for identifying and preventing misconduct did not work, and take steps to improve.”
In response to the settlement, the university is implementing steps to improve the quality and integrity of its research, including the creation of the Advisory Panel on Research Integrity and Excellence, establishment of an integrated leadership structure for research, and the creation of an executive oversight committee.
