The Arizona Republic | February 17, 2016 | By Ken Alltucker
St. Joseph’s Hospital and Medical Center and Chandler Regional Medical Center are among 51 hospitals that have agreed to pay more than $23 million to settle whistleblower claims over Medicare billings for implanted cardiac devices, the U.S. Department of Justice said Wednesday.
The Justice Department did not say how much St. Joseph’s or Chandler Regional would pay as part of the settlement. Both hospitals are owned by San Francisco-based Dignity Health, which will pay $5.9 million for its 18 hospitals, most located in California.
The settlement comes in the wake of a larger settlement last October with 457 hospitals that paid more than $258 million. The earlier settlement, which included 16 Arizona hospitals, was among the largest False Claims Act settlements ever for Medicare.
The Justice Department said both settlements involved a device called an implantable cardioverter defibrillator, which often was implanted too soon after patients suffered a heart attack, had angioplasty or heart-bypass surgery.
Medicare guidelines require doctors to refrain from implanting the devices within 40 days after a heart attack or 90 days following bypass surgery or angioplasty. The purpose of the waiting period is to evaluate whether a patient’s heart function can improve enough to eliminate the need to surgically implant the device, which costs about $25,000, according to the Justice Department.
The Justice Department said the settlement covers surgeries that were performed from 2003 through 2010. The hospitals did not admit wrongdoing as part of the settlement.
Dignity Health said in a statement that it wanted to end the investigation and the cost from ongoing litigation. The health system added that the billing disputes “reflect widespread confusion in the health-care industry regarding federal standards” over guidelines for the cardiac devices.
“As a result, it is often challenging for physicians to ensure their documentation adequately reflects their decision-making in order to comply with complex regulations when making their best medical judgments,” Dignity Health said.
The Justice Department investigation stemmed from a whistleblower complaint filed in U.S. District Court in Florida under the False Claims Act. Under terms of the two settlements, whistleblowers Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a consultant, have received more than $40 million for suing over the billings.
Bryan Vroon, an Atlanta-based lawyer who represented the whistleblowers, said the case reveals a larger problem in the U.S. health-care system: Providers who collect payments from government-funded health programs for procedures that do not follow established guidelines.
“The issue of unnecessary care and care that is not based on science is a massive problem in American health care,” Vroon said. “The Justice Department found a way into reviewing one issue on a national level. It is a window into a much bigger problem.”