Nearly 500 Hospitals Settle Largest Ever Federal False Claims Act Investigation into Cardiac Procedures on Medicare Patients

Landmark Enforcement of National Coverage Determination Recovers $257 Million, Saves Medicare More than $2 Billion

October 30, 2015

A groundbreaking federal investigation has led to nearly 500 hospitals agreeing to pay $257,650,000.00 to settle allegations that they improperly billed Medicare for surgical procedures to implant cardioverter defibrillators (ICDs). The settlement, announced today by the U.S. Department of Justice (DOJ), is the largest ever in terms of number of hospitals under the False Claims Act, and a landmark enforcement of the Medicare Program’s National Coverage Determinations to reduce unnecessary procedures in Medicare patients.

The Justice Department negotiated 70 separate settlements with the hospital systems, including some of the largest systems in the country. HCA and Tenet Healthcare, for example, have agreed to pay $15.8 million and $12.1 million, respectively.

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, both from Louisville, KY – under the False Claims Act which permits whistleblowers to bring a lawsuit on behalf of the Medicare Program. The two whistleblowers were represented by Atlanta-based attorney, Bryan Vroon.

Through their investigation, 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.

Two DOJ attorneys, Jeffrey Dickstein and Amy Easton, led the federal investigation. The investigation has changed cardiac care of Medicare patients by requiring physicians and hospitals to comply with science-based coverage conditions. The DOJ investigation has resulted in major reductions in patients undergoing surgical procedures to implant ICDs. Since the beginning of the DOJ investigation, ICD procedures in Medicare patients have decreased by approximately 28 percent. According to an analysis by Vroon, that reduction represents a savings of more than $2 billion to the Medicare Program during the last five years.

“Jeffrey Dickstein and Amy Easton led this investigation with extraordinary dedication to Medicare and the medical care of elderly patients,” said Vroon. “Their work is critically important to ensuring that Medicare patients receive needed treatment based on science.”

Whistleblowers Leatrice Richards and Tom Schuhmann also praised the work of Dickstein and Easton. “Jeffrey Dickstein and Amy Easton did exceptional work addressing an important issue for patient care,” said Richards. “Their work was comprehensive and extremely skillful in dealing with a range of difficult challenges,” said Schuhmann.

Vroon recognized Richards and Schuhmann as “smart, courageous, and committed to protecting patients and the Medicare Program.”

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 (i.e., 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).” Al-Kahtib, et al, “Non-Evidence-Based ICD Implantation in the United States,” JAMA, January 5, 2011, Volume 305, No. 1, 43, 47. The Duke University researchers further reported, “Patients who received a non–evidence-based ICDs had significantly more comorbidities than patients who received an evidence-based device and were at a higher risk of post-procedural complications (including death).” Id. at p. 47. The researchers recommended, “As such, more efforts should focus on enhancing adherence to evidence-based practice.” Id. at p. 49.

The agreed whistleblower award to Ms. Richards and Mr. Schuhmann is $38,227,500.

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For further information, please contact Bryan Vroon, Law Offices of Bryan Vroon LLC, at (404) 441-9806 or [email protected]. Vroon also represented the whistleblower in the landmark 70 million Stark settlement announced last month involving Broward Health.