St. Joseph Medical Center in Towson, Md., has agreed to pay $22 million to settle allegations of violating the False Claims Act, Anti-Kickback Act and Stark Law, the Office of the Inspector General announced Tuesday. The federal investigation was triggered by physician whistleblowers.
The OIG charged St.Joseph, a 300-bed nonprofit Catholic hospical, with using service contracts to hide kickbacks paid to MidAtlantic Cardiovascular Associates (MACVA) for referring cardiac surgery cases to the hospital from 1996 to 2006.
According to the OIG, the MACVA received payments above fair market value for services not rendered or that were not commercially reasonable.
Under the settlement, the hospital also agreed to settle allegations that it received Medicare payments between Jan. 1, 2008, and May 12, 2009, for medically unnecessary stents performed by Mark Midei, MD, a one-time partner in MACVA who was later employed by SJMC.
According to the OIG, the settlement resolves a lawsuit brought by Stephen D. Lincoln, MD, Peter Horneffer, MD, and Garth McDonald, MD, cardiac surgeons who practiced together as members of Cardiac Surgery Associates in Baltimore. Under federal whistleblower provisions, Lincoln, Hornefer and McDonald will receive a portion of the federal share of the recovery.
"Kickbacks for medical services undermine the integrity of our healthcare system," said 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 OIG settlement also required Saint Joseph's to sign a corporate integrity agreement with the Department of Health and Human Services' Office of Inspector General, requiring the hospital to:
* Appoint physician executives to oversee medical staff quality-of-care matters;
* Hire a peer review consultant to evaluate SJMC's peer review practices; and
* Engage an independent review organization to perform a cardiac catheterization procedures review, evaluating and analyzing the medical necessity and appropriateness of interventional procedures performed at SJMC.
If the hospital fails to comply with the OIG's requirements, it could be excluded from Medicare and Medicaid, according to OIG officials.
"Payoffs to influence healthcare decision-making too often result in inappropriate, unnecessary and harmful medical practices," said Daniel R. Levinson, Inspector General of the Federal Department of Health and Human Services.
According to the OIG, the settlement was the result of an investigation by the U.S. Attorney's Office for the District of Maryland and the Commercial Litigation Branch of the Justice Department's Civil Division with assistance from the U.S. Department of Health and Human Services' Office of Inspector General, the Department of Defense Office of the Inspector General's Defense Criminal Investigative Service and the Office of Personnel Management's Office of Inspector General. The case was handled by Maryland Assistant U.S. Attorney Jamie M. Bennett.
In a statement issued Tuesday by St. Joseph's, the medical center said it reached the agreement without admitting liability in order to avoid the expense and uncertainty of litigation and to allow the medical center to move forward.
"Today, and as we move forward, we stand true to our mission to serve the community with integrity, compassion, and excellence," said Jeffrey K. Norman, SJMC president and CEO. "From the start of the U.S. Attorney's inquiry, St. Joseph Medical Center made it clear that it would cooperate fully with the government. Medical Center leadership operated from the belief that a cooperative and transparent approach guided by its faith-based system best served the interests of its patients and community and reflects our mission and values."