Corporate Crime Report | October 30, 2015
Nearly five hundred hospitals will pay $257 million to settle allegations that they improperly billed Medicare for surgical procedures to implanted cardioverter defibrillators (ICDs).
The Justice Department negotiated 70 separate settlements with the hospital systems, including some of the largest systems in the country.
HCA will pay $15.8 million and Tenet Healthcare will pay $12.1 million.
The federal investigation stemmed from a complaint filed seven years ago by two whistleblowers – Leatrice Richards, a registered cardiovascular nurse and Medicare-compliance and reimbursement consultant, and Thomas Schuhmann, also a Medicare-compliance and reimbursement consultant.
The two whistleblowers were represented by Atlanta-based attorney Bryan Vroon.
The whistleblowers found hundreds of hospitals were billing Medicare for surgeries to implant cardioverter defibrillators that did not meet the medical conditions for Medicare coverage established in the National Coverage Determination (NCD).
Medicare generally excludes coverage for ICD procedures in patients who have undergone coronary bypass surgery or angioplasty within the last 90 days or within 40 days of a heart attack.
The NCD ensures that Medicare patients receive science-based “reasonable and necessary” medical treatment.
The investigation has changed cardiac care of Medicare patients by requiring physicians and hospitals to comply with science-based coverage conditions.
The Department’s investigation has resulted in major reductions in patients undergoing surgical procedures to implant ICDs. Since the beginning of the Department’s investigation, ICD procedures in Medicare patients have decreased by approximately 28 percent.
Vroon estimated that that reduction represents a savings of more than $2 billion to the Medicare Program during the last five years.
Three years after the federal investigation began, a major study led by researchers at Duke University found that in a national sample of 111,707 patients receiving ICDs for primary prevention, 25,145 patients or 22.5 percent were “non–evidence-based ICD implants — patients who were either excluded from the major primary prevention clinical trials of ICD therapy or shown not to benefit from an ICD in other trials.
Richards and Schuhmann will share a whistelblower a $38,227,500 whistleblower award.
“This appears to have been a near-perfect public-private partnership,” said Patrick Burns, of the Taxpayers Against Fraud Education Fund. “Two well-informed whistleblowers came forward. Their information and concerns were well-represented by an experienced False Claims Act attorney who partnered with the U.S. Department of Justice attorneys who did not shrink from tackling a case of this size and complexity. In the end, not only was wasted money recovered, and lives protected, but billions of dollars in future fraud was prevented.
Vroon gave full credit to the two whistleblowers, who he described as “smart and courageous,” and Department of Justice attorneys Jeffrey Dickstein and Amy Easton who he described as a “true example of the best and the brightest attracted to public service.”
“At its core, this whistleblower-initiated case is about healthcare for Medicare patients on the basis of sound science, rather than profit-making,” notes Burns. “Not only did patients not give informed consent, but taxpayers were getting stuck with billions of dollars in bad billing.”
Though this case is not the largest hospital fraud case ever settled, it covers more hospitals than any other action every prosecuted by the U.S. Department of Justice.