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January 30, 2014

Saint Joseph London to pay $16.5 million settlement

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

LAUREL COUNTY, Ky. — Three years after the first claim against the London hospital was filed for alleged unnecessary heart procedures, Saint Joseph London has reached a settlement with the United States government.

The settlement was reached Tuesday, in which the London hospital agreed to pay $16.5 million to resolve allegations that it submitted false or fraudulent claims to the Medicare and Kentucky Medicaid programs.

When hundreds of lawsuits were filed alleging unnecessary cardiac procedures were being performed at Saint Joseph London by a group of cardiologists, the United States Attorney’s Office conducted an investigation into the issues.

The investigation revealed between Jan. 1, 2008 and Aug. 31, 2011, these cardiologists teamed together and performed “invasive cardiac procedures” on patients covered under Medicare and Medicaid. The procedures were not medically needed and violated the False Claims Act because the patients did not meet the guidelines under what is termed as “medically necessary.” Procedures included coronary stents, pacemakers, coronary artery bypass graft surgeries (CABGS) and diagnostic catheterizations. The standard reimbursement for medical procedures such as heart stents ranges between $10,000 and $15,000.

The settlement also resolves claims that Saint Joseph London teamed with these heart doctors in 2008 to provide the cardiac care for the hospital’s patients, thus violating the federal Stark Law and Anti-Kickback Statute. The agreements between the hospital and the doctors arranged for the doctors to refer their patients to the hospital. The government claims Medicare and Medicaid should not pay for claims that arose from the improper financial arrangements between the doctors and the hospital.

“We all rely on health care providers to make treatment decisions based on clinical, not financial, considerations,” said U.S. Attorney Kerry B. Harvey. “The conduct alleged in this case violates that fundamental trust and squanders scarce public resources set aside for legitimate health care needs. We will use every available tool to protect our federal health care programs and the patients who they serve.”

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