The Christ Hospital, Health Alliance Pay $108M to Settle Whistleblower Suit

John Commins, May 24, 2010

The Health Alliance of Greater Cincinnati and The Christ Hospital will pay $108 million to settle a federal whistleblower suit alleging that the hospital ran a kickback scheme with physicians to funnel patients to its cardiac care center, the Department of Justice announced.

Susan Croushore, president/CEO of The Christ Hospital, said the hospital and HAGC dispute the government's allegations, which also include violations of the False Claims Act, but signed the agreement "instead of risking a potential catastrophic judgment that could jeopardize our ability to provide service to this community."

"This settlement allows The Christ Hospital to avoid the risk of the in excess of a $1 billion award that was sought by the government," Croushore said in a prepared statement.

The government alleged that The Christ Hospital, a 555-bed acute care hospital in Mount Auburn, OH, limited work at the Heart Station–an outpatient cardiology testing unit that provides non-invasive heart procedures–to cardiologists who referred patients to the hospital. Cardiologists whose referrals contributed at least 2% of the hospital's yearly gross revenues were rewarded with a corresponding percentage of time at the Heart Station, where they could bill for the patients they treated at the unit and for any follow-up procedures that these patients required, prosecutors alleged.

The allegations violate the federal Anti-Kickback Statute, which prohibits a hospital from offering or paying, or a physician from soliciting or receiving, anything of value in return for patient referrals. Claims to Medicare and Medicaid that were submitted by The Christ Hospital as a result of the kickbacks also violated the False Claims Act, prosecutors said.

"Healthcare providers should make medical decisions based on the needs of their patients, not on the financial interests of physicians or other providers," said Tony West, assistant attorney general for the Civil Division of the Department of Justice. "We will not allow hospitals to put profits ahead of sound medical decision-making."

Harry Fry, MD, a retired cardiologist, filed the whistleblower suit against The Christ in 2003, and could collect $23.5 million from the settlement. The Justice Department investigated the allegations for five years before intervening in 2008.

Croushore said The Christ "provided necessary and often life-saving medical care by ensuring sufficient cardiologists coverage to read heart tests provided in the hospital."

"There was no challenge in this case to the medical necessity or quality of patient care. Nor did the government suffer any loss, as it did not expend any money for the services beyond standard Medicare payments," Croushore said.

The Christ Hospital declined to enter into a corporate integrity agreement that was acceptable to HHS' Office of the Inspector General. As a result, OIG did not provide a release of its administrative exclusion authorities and is still evaluating the case.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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