A federal monitor said theUniversity of Medicine and Dentistry of New Jersey flagrantly violated Stark and anti-kickback laws in a scheme in which people at all levels of the organization, including interim President Bruce Vladeck, were complicit. Beginning in early 2002, UMDNJ’s administration, in coordination with its legal experts, "devised an illegal scheme" to pay cardiologists for referrals to its struggling cardiac surgery program, the federal monitor, Herbert Stern, said in a report based on a five-month investigation. The scheme involved $5.7 million in illegal payments to 18 doctors since 2002 and exposed the university to nearly $80 million in potential fines and penalties under the Stark and anti-kickback laws, Stern said. Disguised as "salaries," the fees were "nothing more than referral fees paid to doctors in order to induce them to bring their patients to UMDNJ," he said.
According to Stern, the school subsequently engaged in a cover-up in direct violation of a deferred prosecution agreement it signed with the federal government last year in order to avoid prosecution for fraud. Vladeck, a former administer of the federal Medicare program, became UMDNJ’s interim chief earlier this year as part of a shake-up that followed the agreement. At deadline, UMDNJ declined to comment on the monitor’s allegations because officials were still reviewing the report.