Pittsburgh Post‑Gazette | October 31, 2015 | By David Templeton

UPMC has reached a $5.4 million settlement with the U.S. Department of Justice for false-claim violations involving implantation of cardiac devices against Medicare guidelines in patients and then receiving Medicare payments.

Four UPMC hospitals — Hamot, Mercy, Passavant and Presbyterian Shadyside — are among 457 hospitals nationwide that have reached settlements totaling nearly $258 million for violating Medicare billing rules. The settlements were reached with no admission of wrongdoing.

“The settlement reflects UPMC’s full cooperation with the Department of Justice and UPMC’s commitment to adhering to coverage rules set forth by Medicare,” UPMC said in a statement.

“Additionally, UPMC entered into the settlement in the interest of avoiding protracted litigation.”

Saint Vincent Hospital in Erie, part of the Allegheny Health Network, also paid a $1.4 million settlement.

In a statement, AHN spokesman Dan Laurent said the hospital “has strengthened its policies in order to further ensure that use of these devices is consistent with national guidelines. Saint Vincent denies any wrongdoing in the matter and reached this settlement without admission of liability in order to avoid the uncertainty, inconvenience and expense of prolonged litigation.”

In one of the nation’s largest whistleblower cases, the Justice Department took action against hospitals and medical systems that implanted cardiovector defibrillators, at a cost of about $25,000 each to Medicare, within 40 days after a patient had a heart attack or within 90 days after a patient had undergone bypass surgery or angioplasty.

From 2003 to 2010, the Justice Department says, each of these hospitals did the procedures against Medicare’s National Coverage Determination guidelines, which expressly prohibit the procedures from being done so soon after a heart attack or heart procedure, with certain exceptions. Defibrillators implanted in the chest and attached to the heart deliver a shock to return chaotic heart rhythms, or fibrillations, to normal rhythm to prevent cardiac arrest.

The Justice Department said it used a panel of leading cardiologists to review thousands of patients’ medical records during its seven-year investigation and negotiated 70 different settlements with hospital systems.

“The medical purpose of a waiting period of 40 days for a heart attack and 90 days for bypass/​angioplasty is to give the heart an opportunity to improve function on its own to the point that [a defibrillator] may not be necessary,” the department said.

“We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program, while protecting patient health,” Benjamin C. Mizer, principal deputy assistant attorney general with the Justice Department, said in a release.

In terms of the number of defendants, the settlements represent one of the largest whistleblower lawsuits in the United States and one of the department’s most significant recoveries to date, he said.

Settlement amounts largely consist of reimbursement for Medicare payments with some punitive damages, said Bryan Vroon, an Atlanta attorney representing the two Louisville whistleblowers, Leatrice Ford Richards and Thomas Schulmann, who introduced evidence to the Justice Department eight years ago.

Ms. Richards is a registered cardiovascular nurse and Medicare consultant; Mr. Schulmann is a Medicare compliance and reimbursement consultant.

They stand to receive $38 million from the settlements, Mr. Vroon said, while the department continues investigating additional hospitals and health systems for performing unnecessary procedures against science‑based guidelines.

The amount represents about 15 percent of the settlement amount.

“When you file these [whistleblower] cases, the government doesn’t intervene in over 90 percent of them and you’re already up against tough odds,” he said. “They risk careers and livelihoods and wanted to do something about what they thought was a major problem happening clinically.”

He said defibrillator procedures have dropped by 20,000 a year ever since the investigation got underway and once hospitals began receiving subpoenas.

“The case is a window into a larger issue, an issue of unnecessary care not based in science,” Mr. Vroon said. “You can’t say why thousands of procedures — close to 10,000 procedures — were done and what they were thinking of for each procedure. But there are multiple factors why this happens, including ignorance of the science and disregard of the science and Medicare requirements.”