Local News

January 30, 2014

Saint Joseph London to pay $16.5 million settlement

Second largest federal health care fraud settlement in eastern Ky. district



Saint Joseph London also agreed to undergo substantial internal compliance reforms and commit to a review of its claims to federal health care programs by a “third party,” not associated with the hospital, for the next five years.

"Cases such as this threaten both the health of patients and the financial integrity of the Medicare and Medicaid programs," said Derrick L. Jackson, special agent in charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "This settlement is another example of the Office of Inspector General’s commitment to protecting our beneficiaries and to recovering any money that has been improperly paid as a result of medically unnecessary procedures."

This settlement is the second largest health care fraud settlement in the Eastern District of Kentucky, which includes 67 counties.

The settlement stems from a whistle blower complaint filed by three Lexington cardiologists, who, under the False Claims Act, can share in the settlement proceeds because they drew attention to the situation. The three doctors named in the investigation will receive $2.5 million under the agreement. Saint Joseph London also participated in the “whistle blowers” by reporting that Dr. Sandesh Patil was performing medically unnecessary coronary stents. Patil was named in a federal investigation for health care fraud, pled guilty and was sentenced to 30 months in prison.

“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Stuart Delery, assistant attorney general for the Civil Division of the United States Dept. of Justice. “The Department of Justice will not tolerate those who abuse the public health care programs to which we all contribute and on which we all depend.”

Since Medicaid is distributed from the federal government to individual states, the Commonwealth of Kentucky will also receive $365,851 — its share of the government’s recovery of Medicaid funds.

Through the agreement, Saint Joseph London does not admit any guilt, but simply that it will settle financial issues from the alleged Medicaid and Medicare fraud. The agreement does not, however,  settle the individual lawsuits filed in Laurel Circuit Court against the hospital.

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