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DOJ Intervenes in TN Stent Fraud Lawsuit

Margaret Dick Tocknell, for HealthLeaders Media, June 14, 2011

A whistleblower lawsuit in Jackson, TN involving two area health systems has attracted the attention of the U.S. Department of Justice, which has ordered that the four-year-old case be unsealed and the complaint served within 120 days.

The case involves two prominent cardiologists, two area health systems, and a radiologist and centers on allegations of overutilization of cardiac medical services, kickbacks, and a self-referral scheme.

In June 2007, Wood M. Deming, M.D., filed a suit individually and on behalf of Regional Cardiology Consultants PC charging Elie H. Korban, M.D., with "blatant overutilization" of medical services, including angiography, angioplasty, and stenting with the intent to defraud government insurance programs.

The suit, which filed in the U.S. District Court for Western Tennessee, also charged Joel Perchik, M.D., and executives at Jackson-Madison County General Hospital and Regional Hospital of Jackson with engaging in "a bilateral kickback and self-referral scheme."

Dr. Deming contends that the hospital CEOs were aware of the overutilization and went so far as to shield Dr. Korban "from any scrutiny by the hospitals' clinical quality improvement mechanisms." In addition, Deming charges that the hospital CEOs and Dr. Perchik "individually engaged in a pattern of bad-faith peer review of any physician who chose to oppose the hospitals' drive for excess and inappropriately collected remuneration…such that such physicians were eliminated from the medical staff if they chose to speak out as whistleblowers concerning any aspect of the scheme."

According to court documents, an order was filed on June 2, 2011 notifying the defendants of the government's intention to intervene in that "part of the order which alleges claims against Elie H. Korban for false and fraudulent billing for unnecessary cardiac stent procedures." The government declined to intervene on any other part of the lawsuit against Korban or in any of the claims against the hospitals or their CEOs.

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