A whistle-blower’s case the Justice Department said it will pursue against Christ Hospital in Cincinnati and a major cardiology group appears to expand what the government typically calls a kickback, arguing that giving physicians an opportunity to make money amounts to an illegal payment.
Meanwhile, Iasis Healthcare Corp., a 16-hospital system based in Franklin, Tenn., put to rest a whistle-blower lawsuit, a result that may have been presaged when the government’s lawyers took a pass on it last August.
The False Claims Act violations alleged of Christ Hospital and its co-defendants tread new legal ground, said their lawyers and some independent observers. The initial lawsuit was filed under seal in 2003 by Harry Fry, a cardiologist who formerly worked at 511-bed Christ Hospital. The Justice Department intervened in the case April 1 and asked the judge to lift the seal. Whistle-blower lawsuits backed by the government have proven far more likely to yield returns, either from settlements or judgments (See chart).
“What the government is saying is, where the physician has the opportunity to earn a fee from a federal healthcare program by virtue of using hospital facilities, that naked opportunity to earn the fee is itself remuneration under the fraud and abuse laws,” said Paul Danello, a lawyer in the Washington office of Squire, Sanders & Dempsey representing Christ Hospital.
The argument, as explained in Fry’s most recent complaint and echoed in the government’s news release, goes like this: Christ Hospital and the dominant cardiology group in the hospital and the region, now called Ohio Heart & Vascular Center, devised a system in which the cardiologists who generated the most revenue for the hospital via procedures such as cardiac catheterizations and angioplasties were rewarded with panel time on the hospital’s cardiac diagnostic unit, called the heart station. Also named as a defendant is the three-hospital Health Alliance of Greater Cincinnati, from which Christ Hospital has withdrawn, though the terms remain disputed.
The favored cardiologists and their group benefited from the professional fees earned from the hospital’s unassigned patients and with no overhead, Fry alleged in the complaint, and “vastly increases a cardiologist’s (and his or her group’s) access to new patients and revenue.”
A growing body of False Claims Act lawsuits relies on the grounds that providers are technically making a false claim if they bill a government program while wrongly certifying they’ve complied with all relevant laws. In this case, the complaint characterizes the assignment of panel time as illegal remuneration under the anti-kickback statute, a criminal law that lacks a private cause of action allowing whistle-blowers to sue.
Danello disputed Fry’s version of how the hospital assigned time at the heart station and described the duty as more of a drag than a prize, with Medicare paying meager rates for reading tests and little actual opportunity of picking up new patients. The hospital’s contention is that physicians assigned to the heart station were the ones most likely to show up—the ones most often working in the hospital.
More importantly, the Cincinnati case diverges from the more typical ones of its ilk in characterizing the assignment of panel time as a kickback, regardless of the underlying facts, Danello said, countering that there was “nothing of tangible, demonstrable value” that encouraged physicians to recommend and perform procedures that were unnecessary or dangerous for patients and a drain on Medicare and Medicaid coffers.
Out of 6,777 unassigned patients whose tests were read by an Ohio Heart & Vascular physician at the heart station in 2002, only 18 were later admitted to Christ Hospital for a significant cardiac procedure, Danello said, citing data collected for one of multiple settlement offers he said Christ extended to the government without success.
Robert Rhoad, a partner in Crowell & Moring in Washington, who has represented both plaintiffs and defendants in healthcare False Claims Act lawsuits, agreed with Danello’s perception. “It strikes me as odd they’ve tried to extend the reach that far,” Rhoad said. “The best physicians, and the physicians that are the busiest, are likely to need the most time. It’s almost a self-fulfilling prophecy. … Where do you draw the line between benign conduct of a provider simply trying to manage a healthcare system and something that’s a violation?”
Rhoad said he views the case as one “where the government’s reach might extend beyond its grasp.” But, he added, “If they succeed, it’s not simply about the money they might recover from these defendants; it could serve as a blueprint case for them to expand exponentially the recoveries they can get under this kind of case.”
The Justice Department, which declined to comment beyond its news release, has 120 days from the date it intervened in the case to file its own version of the facts and arguments, the next step in the legal process.
Meanwhile, on March 31 a federal judge in Arizona dismissed a False Claims Act lawsuit against Iasis with prejudice, meaning there’s no opportunity for the plaintiff to rework the case and try again. The complaint, filed in 2005, was unsealed in August 2007 after the Justice Department said it wasn’t prepared to intervene in the case before a court-ordered deadline.
