Healthcare Business News

Ohio hospital, cardiac group to pay $4.4 million False Claims settlement

The agreement comes as heart care draws national scrutiny.

By Joe Carlson
Posted: January 4, 2013 - 6:15 pm ET

(This story has been updated with comment from EMH Healthcare.)

A standalone northern Ohio hospital and a cardiac-care medical group have agreed to pay a total of $4.4 million to settle whistle-blower allegations that they billed Medicare for unnecessary angioplasty and stent procedures between 2001 and 2006.

EMH Regional Medical Center, Elyria, Ohio, agreed to pay $3.9 million while North Ohio Heart Center—whose physicians practiced at the hospital—will settle for $542,000. Neither admitted wrong-doing in the False Claims Act settlement.

Word of the settlement comes at a time when heart care has fallen under the microscope nationally.

Last year, HCA revealed in Securities and Exchange Commission filings that the U.S. attorney's office in Miami is investigating the medical necessity of interventional cardiology procedures at several of its hospitals, though HCA has defended its practices. Experts have told Modern Healthcare that the investigation is most likely based on False Claims Act allegations from a whistle-blower.

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Meanwhile, more than 100 hospitals across the U.S. are in the process of conducting “self-audits” of their implantable defibrillators, which are surgically implanted devices used to shock the heart back into normal rhythm. Those internal investigations are part of a years-long probe into the lucrative devices that some studies suggest are overused.

In Ohio, EMH Regional's former catheterization laboratory manager, Kenny Loughner, accused the 266-bed hospital and doctors in a 2006 lawsuit of implanting stents and performing angioplasty procedures on patients whose heart disease had not blocked their arteries enough to justify the procedures.

Dr. John Schaeffer, chairman and president of North Ohio Heart Center, framed the issue as one of Medicare payment rules, not medical necessity.

“It's very important to note that this settlement is only about whether or not Medicare covered some procedures we did six to 10 years ago that were considered cutting edge at the time,” Schaeffer wrote in a blog post on Friday. “As the physicians on the ground when these decisions were made and the procedures were performed, we felt confident we were making the correct choices for our patients. We still do.”

Dr. Donald Sheldon, president and CEO of EMH Healthcare, said in a written statement that the settlement represented “a small percentage” of its cardiology patients who were judged by Medicare to have not had severe-enough medical conditions to justify the procedures performed by North Ohio Heart Center doctors.

“No patients, to our knowledge, were ever at risk, and there is no question that the patients treated had heart disease and some degree of blockage,” Sheldon's statement says. “Cardiology is a significant service line for this organization, and EMH Healthcare remains committed to providing the most efficient care to patients.”

Loughner, the whistle-blower, will receive $661,000 as his share of the proceeds of the litigation, the Justice Department said in a written statement.

The $4.4 million settlement announced Friday falls within a range of settlements paid by hospitals for similar litigation involving allegations of medically unnecessary heart procedures.

In August 2011, Peninsula Regional Medical Center, Salisbury, Md., agreed to pay $1.8 million and enter a corporate integrity agreement to settle allegations that it failed to stop Dr. John McLean from performing unneeded heart procedures. McLean was later convicted and sentenced to eight years in prison, and is appealing his conviction while imprisoned.

In August 2006, Our Lady of Lourdes Regional Medical Center, Lafayette, La., agreed to pay $3.8 million in August 2006 to settle allegations that it violated the False Claims Act by submitting bills for angioplasty and stenting procedures performed by Dr. Mehmood Patel. Patel was convicted in 2008 and sentenced to 10 years, entering prison last month.

The Ohio settlement was eclipsed by the $22 million sum agreed to in November 2010 by St. Joseph Medical Center, Towson, Md., which also entered a corporate integrity agreement to settle allegations that it engaged in kickbacks to generate prohibited referrals for surgeries involving Dr. Mark Midei. Midei has maintained his innocence and fought to get his medical license back.

Catholic Health Initiatives sold the Towson hospital last month to the University of Maryland Medical System for an undisclosed sum.

None of the hospitals in Maryland or Louisiana admitted any wrong-doing in settling their cases.

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