Alliance, hospital to pay $108 million settlement

The Health Alliance of Greater Cincinnati and former member Christ Hospital agreed to pay a total of $108 million to settle a False Claims Act lawsuit alleging what the U.S. Justice Department called a “pay-for-play” scheme for cardiologists.

Both organizations have denied the allegations and do not admit liability in the settlement agreement, which calls for one of the largest sums ever collected from a hospital or health system in a False Claims Act case.

The government contends that from 1997 to 2004, 513-bed Christ Hospital scheduled cardiologists at a diagnostic unit based on how much business they brought to the hospital. The assignments amounted to kickbacks, the Justice Department alleged, because the cardiologists could bill for their diagnostic services and pick up new patients for follow-up procedures.

The case stems from a whistle-blower lawsuit filed in 2003 by a cardiologist who formerly worked at Christ Hospital, Harry Fry, who is set to receive $23.5 million from the payment. The Justice Department joined the case in 2008.

Christ Hospital, meanwhile, broke away from the Health Alliance in a legal battle that dragged on from 2006 to 2009. The settlement of the False Claims Act lawsuit appears timed with a final agreement the Health Alliance signed late last month with two more departing hospitals and effectively ending the alliance, with the University of Cincinnati, owner of 481-bed University Hospital, as the only remaining member. A Health Alliance spokesman said the system is deferring to Christ Hospital for comment on the case.

Christ Hospital President and CEO Susan Croushore said in a written statement that the hospital decided to contribute to the settlement “instead of risking a potential catastrophic judgment that could jeopardize our ability to provide service to this community.”