The U.S. attorney's office in Kansas, having scored a major win in April with the conviction of four healthcare providers on criminal, patient kickback charges, may have trained its cross hairs on its next target.
In late May Via Christi Health System in Wichita, Kan., received subpoenas signed by Assistant U.S. Attorney Tanya Treadway requesting more information on the hospital's relationship with the Blue Valley Medical Group.
In April, a jury in U.S. District Court in Kansas City, Kan., convicted two physicians at Blue Valley and two hospital executives at Baptist Medical Center in Kansas City, Mo., in a patients-for-cash scheme (April 12, p. 2). Federal anti-kickback statutes bar any form of remuneration to induce Medicare or Medicaid patient referrals.
It is not known specifically who or what has attracted Treadway's interest at Via Christi. However, two names have appeared in the Baptist indictment and in trial testimony already: LeRoy Rheault, Via Christi's chief executive officer, and Robert Heath, its general counsel.
The hospital referred all questions regarding Rheault and Heath to the hospital's attorney.
The potential violations of federal law occurred at the former St. Joseph Medical Center, which merged in 1995 with St. Francis, both in Wichita, to form Via Christi.
Rheault, 58, was CEO at St. Joseph from 1988 to 1995, when he became system CEO. Heath was general counsel at St. Joseph before becoming system general counsel.
According to a 1998 indictment of Blue Valley osteopaths Robert LaHue and Ronald LaHue and the Baptist executives, St. Joseph entered an agreement with Blue Valley in 1988 or later to treat nursing home patients referred by the medical group. Blue Valley, now defunct, was owned by Robert LaHue.
The LaHue brothers were convicted on April 5 by a federal jury in Kansas City, Kan., of soliciting bribes from hospitals to refer Medicare patients to the hospitals. One of the counts on which the LaHues were convicted concerned St. Joseph. They took illegal fees for referrals to that hospital, the jury found. Neither St. Joseph itself nor its executives were accused in that trial.
Also convicted of participating in the overall payments-for-patients conspiracy were Dan Anderson, former CEO of Baptist Medical Center, and Dennis McClatchey, Baptist's former chief operating officer.
Baptist had previously reached a civil settlement with the government and paid a fine of $17.5 million. Bethany Medical Center in Kansas City, Kan., also paid a fine of $1.2 million in the case.
St. Joseph has not reached any civil settlement with the government or been presented with any request to do so, said the hospital's attorney, Jack Focht. St. Joseph received its first subpoenas from the U.S. attorney's office in 1994.
Heath discussed his hospital's position with MODERN HEALTHCARE in 1997 shortly after the U.S. attorney's office first indicted the LaHues (June 23, 1997, p. 2).
"It's unfortunate that the allegations against the physicians group implicate our organization," Heath said at the time. "There was never any intent to violate the law. The contract that was entered into was to help us develop geriatric services. It was recognized as an unmet need in our community."
An earlier indictment of the LaHues, filed June 11, 1997, said St. Joseph agreed to pay Blue Valley $50,000 a year. The document was signed by Rheault and Robert LaHue. In July 1992 the hospital and Blue Valley made another agreement, this time to pay $100,000 a year. St. Joseph allegedly paid Blue Valley a total of $337,500, the indictment said.
The statute of limitations on prosecuting St. Joseph expires in August, Focht said.