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St. Joseph's to Pay $22M to Settle Federal Charges

 |  By cclark@healthleadersmedia.com  
   November 10, 2010

St. Joseph's Medical Center in Towson, MD has agreed to pay $22 million to settle accusations of paying kickbacks involving a Pikesville, MD cardiology practice, and allowing a doctor to place medically unnecessary stents in patients covered by a federal program, the Department of Justice has announced.

The charges were filed under the federal False Claims Act and the Stark Law against MidAtlantic Cardiovascular Associates (MACVA).

According to a federal release, St. Joseph's made payments to MidAtlantic, "under the guise of professional services agreements," and in exchange MidAtlantic referred back to the medical center patients for "lucrative" cardiovascular cases, including cardiac surgery and interventional cardiology procedures between Jan. 1, 1996, to Jan. 1, 2006.

"Kickbacks for medical services undermine the integrity of our health care system," says Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "When hospitals put their own financial interests ahead of the best interests of patients, we will take action."

The payment settles federal accusations that the hospital received federal health benefit program funds for medically unnecessary stents performed by Mark Midei, MD, a one-time MACVA partner, who was later employed by SJMC. Midei was alleged to have placed the stents between Jan. 1, 2008 and May 12, 2009.

St. Joseph's is subject to exclusion from federal healthcare programs including Medicare and Medicaid if it fails to comply with the U.S. Department of Health and Human Services and Office of Inspector General corporate integrity agreement.

The agreement requires the hospital to:

  • Appoint physician executives to oversee medical staff quality of care
  • Hire a peer review consultant to review peer-review practices
  • Hire an independent review organization to perform cardiac catheterization procedure reviews to evaluate their medical necessity.

The case was originally brought by whistleblowers, Stephen D. Lincoln, MD., Peter Horneffer, MD. and Garth McDonald, MD., cardiac surgeons who practiced as members of Cardiac Surgery Associates in Baltimore.  The lawsuit, in the District of Maryland in June, contains allegations that SJMC violated the Anti-Kickback Act, Stark Law and False Claims Act by paying various forms of illegal remuneration to MACVA to induce referrals of patients insured by federal health care programs for cardiac procedures.

Under qui tam provisions of the anti-kick back statutes, the whistleblowers will receive a portion of the $22 million.

According to a DOJ statement, "the settlement agreement resolves issues relating to 11 professional services agreements between MidAtlantic and St. Joseph under which MACVA received payments above fair market value, for services not rendered or that were not commercially reasonable and were entered into for the purpose of inducing referrals by MACVA to SJMC."

"Kickbacks give doctors an incentive to pursue unnecessary treatments that are costly and sometimes even dangerous to patients," says U.S. Attorney Rod Rosenstein. "Medical care providers are prohibited from giving or receiving kickbacks because of the risk that they will put their own financial interests ahead of their patients' interests."

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