May 30, 2014

DOJ Catch Of The Week — King’s Daughters Medical Center

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Source: King’s Daughter Medical Center

By the C|C Whistleblower Lawyer Team

This week’s Department of Justice “catch of the week” goes to King’s Daughters Medical Center.  On Wednesday, this large hospital in northeast Kentucky agreed to pay $41 million to resolve government charges that it violated the False Claims Act by submitting claims to Medicare and Kentucky Medicaid programs for medically unnecessary cardiology procedures.  See DOJ press release.  It is one of the largest settlements to date in the federal crackdown on unnecessary heart procedures.

According to the government, the hospital between 2006 and 2011 billed for numerous coronary stents and diagnostic catheterizations for Medicare and Medicaid patients who did not need them.  The government also alleged that several King’s Daughters’ physicians falsified medical records in order to justify these unnecessary procedures, which generated millions of dollars in Medicare and Kentucky Medicaid reimbursements for the hospital.  The settlement also resolves allegations the hospital violated the Stark Law by paying certain cardiologists salaries that were unreasonably high in exchange for referring patients to the hospital for lucrative cardiac procedures.

Dr. Richard Paulus, the hospital’s former chief cardiologist, and the namesake of its heart center, is under criminal investigation for his role in the alleged scheme.  In addition, hundreds of patients have filed civil claims against him and the hospital for the unnecessary procedures they allegedly received.  Tom Dearing, a King’s Daughters spokesman, said the hospital settled the government case to avoid draining valuable resources.  He added that the hospital “needs to turn the page” with “intensive rehabilitation work” and that “we all need to play by the rules, particularly when we’re talking about invasive procedures.”

The government could not agree more.  In the DOJ’s announcement of the settlement, Assistant Attorney General Stuart F. Delery emphasized that it “will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk by providing medically unnecessary care.”  US Attorney Kerry Harvey, who led the investigation, strongly echoed this sentiment: “The conduct alleged in this matter is unacceptable, victimizing both taxpayers and patients. . . . We will not relent in our efforts to protect the public from the sort of systematic misconduct alleged in this case.”

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