A federal judge in Kansas slapped the government's fraud-fighting efforts on the wrist last week by overturning the jury conviction of a hospital executive charged with Medicare fraud.
In a 77-page ruling issued July 21, U.S. District Judge John Lungstrum in Kansas City, Kan., acquitted Dennis McClatchey of charges that he participated in an illegal patients-for-cash scheme as chief operating officer of 315-bed Baptist Medical Center in Kansas City, Mo.
Lungstrum said the evidence did not support the jury verdict in April that McClatchey intended to break the Medicare kickback statutes.
Although Lungstrum acquitted McClatchey, he upheld the convictions of the three other defendants, including former Baptist Chief Executive Officer Dan Anderson, in the closely watched case.
Anderson and McClatchey were the first hospital executives ever convicted of criminally violating the kickback statutes, which bar any form of remuneration to induce the referral of Medicare or Medicaid patients.
Anderson, along with co-defendants Robert LaHue, D.O., and Ronald LaHue, D.O., are scheduled to be sentenced Aug. 16.
In the case of Ronald LaHue, however, the judge removed one conviction-conspiring to receive payments for patients at Alexian Brothers Hospital in St. Louis.
McClatchey, reached on his first day back at work as senior vice president for corporate communications at Health Midwest, said, "I'm obviously very, very relieved."
He said his relief was tempered by sadness for his friend Anderson, whose conviction was upheld.
The U.S. attorney for Kansas, Jackie Williams, said he will appeal Lungstrum's acquittal of McClatchey to the 10th U.S. Circuit Court of Appeals in Denver.