Hospital Pays $16.5 Million to Settle Claim of Unnecessary Cardiac Procedures

NEW YORK (MainStreet) — The mandate of Obamacare insurance is being blamed for rising healthcare premiums, but perhaps the discussion should include the impact of rampant fraud on healthcare costs.

Consider a case settled this week against the Saint Joseph Health System. The Kentucky-based hospital has agreed to pay $16.5 million to resolve allegations of submitting false claims to the Medicare and Kentucky Medicaid programs for medically unnecessary cardiac procedures.

The Justice Department alleges that "doctors working at Saint Joseph Hospital performed numerous invasive cardiac procedures, including coronary stents, pacemakers, coronary artery bypass graft surgeries and diagnostic catheterizations, on Medicare and Medicaid patients who did not need them, and that the hospital was aware of these unnecessary procedures."

The doctors implicated in the purported medical scam are affiliated with Cumberland Clinic, a physician group that entered into an exclusive arrangement with Saint Joseph Hospital in 2008 to provide cardiology services to the hospital's patients.

Cumberland Clinic is owned by two London-based cardiologists, Satyabrata Chatterjee and Ashwini Anand.

"Hospitals that place their financial interests above the well-being of their patients will be held accountable," said Assistant Attorney General for the Justice Department's Civil Division Stuart F. Delery. "The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk."

Saint Joseph Hospital is also said to have entered into bogus management agreements with the physicians to financially motivate Chatterjee and Anand to refer patients to the hospital.

"We all rely on health care providers to make treatment decisions based on clinical, not financial, considerations," said U.S. Attorney for the Eastern District of Kentucky Kerry Harvey. "The conduct alleged in this case violates that fundamental trust and squanders scarce public resources set aside for legitimate health care needs. We will use every available tool to protect our federal health care programs and the patients who they serve."

The settlement stipulates that the hospital will 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.

Since January 2009, the Justice Department has recovered a total of more than $17.1 billion through False Claims Act cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.

The DOJ says claims settled by this agreement are allegations only, and there has been no determination of liability.

--Written by Hal M. Bundrick for MainStreet

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