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DOJ Intervenes in TN Stent Fraud Lawsuit

 |  By Margaret@example.com  
   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.

That means that although the DOJ will not pursue those charges, Dr. Deming may continue those parts of the lawsuit on his own.

In a statement issued to the Jackson Sun, a spokesperson for the Regional Hospital of Jackson said "Regional Hospital of Jackson is pleased that the U.S. chose not to intervene in the portion of the relator's lawsuit which named the hospital and a former administrator. The hospital remains committed to providing high-quality, appropriate health services for patients and the community."

The DOJ's interest in the case may reflect renewed interest on the part of Congress and the Department of Health and Human Services in uncovering and pursuing fraud in the Medicaid and Medicare programs, especially in terms of stent usage.

In December 2010 the U.S. Senate Committee on Finance issued a staff report on cardiac stent usage at a Maryland hospital. The report looked at the case of a doctor who reportedly implanted nearly 600 potentially medically unnecessary stents from 2007 through mid-2009. The report found that the questionable implants cost the Medicare program $3.8 million during that period.

That report noted that between 2007 and 2009, the Medicare Part A program paid an estimated $11.1 billion for cardiac stent procedures.

The DOJ would not comment on its involvement in the lawsuit. The government will file its complaint within 60 days, according to a statement filed by the U.S. Attorneys' Office.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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