Maryland's MedStar and two affiliate hospitals will pay the government $35 million in a False Claims Act settlement over allegations that include a kickback scheme with a cardiology practice, the U.S. Justice Department announced Thursday.
The settlement resolves two whistleblower lawsuits as well as federal allegations of financial misconduct, including a claim filed nearly a decade ago.
"While we deny all wrongdoing, we fully cooperated with the government's investigation of these matters and ultimately determined that it was best to settle these matters in order to avoid protracted and distracting litigation," MedStar said in a statement.
One set of allegations claimed that MedStar's Union Memorial Hospital in Baltimore offered kickbacks to the cardiology firm MidAtlantic Cardiovascular Associates "under the guise of professional services agreements." In exchange, the practice allegedly referred patients to the hospital for cardiac surgery and other cardiology procedures. This went on for more than five years, from Jan. 1, 2006, through July 31, 2011, according to the Justice Department.
Additionally, the Justice Department alleged that MedStar illegally charged Medicare for unnecessary stents performed by one of its doctors, Dr. John Wang. Wang, a former employee of MidAtlantic Cardiovascular Associates, later went to work for MedStar. Medicare allegedly received these false claims from Jan. 1, 2006 to Dec. 28, 2012.
The settlement covers two whistleblower lawsuits. The first is a 2010 claim by cardiac surgeons from Baltimore's Cardiac Surgery Associates, a nearby competitor to the aforementioned MidAtlantic Cardiovascular Associates. The doctors alleged that two MedStar hospitals paid kickbacks to MidAtlantic, which is based in Pikesville, Md., in exchange for Medicare patient referrals for cardiac procedures.
The second claim was filed in 2012 by former patients of Wang, the same physician who allegedly charged Medicare for unnecessary stents. The whistleblowers alleged that Wang, MedStar and MedStar Union Memorial hospital "engaged in a pattern and practice" of performing unnecessary stent procedures and then illegally billed Medicare.
Both whistleblower lawsuits were filed in U.S. District Court in Maryland. MedStar said in regards to the claims that "the two cases have been settled without any findings of liability."
"MedStar has full confidence in our quality assurance and compliance programs, and we remain fully focused on advancing our patient care mission," the health system statement said.
Assistant Attorney General Jody Hunt, of the Justice Department's civil division, U.S. Attorney for the District of Maryland Robert Hur, and Special Agent in Charge Maureen Dixon of HHS' Office of Inspector General announced the settlement on Thursday.
"Kickbacks made in connection with the provision of medical services undermine the integrity of our healthcare system," Hunt said. "We will take action against medical service providers who through unlawful conduct put their own financial interests ahead of the best interests of patients."
