Settlements Valued At More Than $75 Million Completed In the First Half of 2014
LEXINGTON – The U.S. Attorney’s Office’s concerted efforts to combat Medicare and Medicaid fraud and recover wrongfully obtained taxpayer dollars, are bearing fruit as evidenced by recent civil settlements totaling more than $75 million. The settlements – highlighted by today’s $40.9 million dollar deal with King’s Daughters Medical Center in Ashland, Kentucky – result from a reorganization of investigative and prosecutorial resources within the U.S. Attorney’s Office to focus on health care fraud.
“Health care fraud has been a Department of Justice priority for several years, and our office has made it a priority as well,” said U.S. Attorney Kerry B. Harvey. “There is a tremendous amount of taxpayer money in federal health care programs like Medicare and Medicaid being spent in the Eastern District of Kentucky. Where there are signs that health care providers have obtained taxpayer dollars through fraud or other forms of abuse, it is our responsibility to investigate those allegations and recover those funds to the fullest extent allowed by the evidence and the law.”
The Eastern District of Kentucky covers 67 counties in the eastern half of the state, and US. Attorney Harvey leads the U.S Attorney’s Office, which has responsibility for enforcing federal laws in that part of the state.
In late 2010, U.S. Attorney Harvey reorganized the U.S. Attorney’s Office to create a fraud unit that focuses in part on fighting civil fraud, particularly health care fraud. The attorneys and other personnel assigned to the group – including a paralegal, auditor, and investigator – work closely with law enforcement agencies such as FBI and Health and Human Services (HHS) and with state level counterparts at the Kentucky Office of the Attorney General to investigate health care fraud allegations. Where appropriate, criminal and civil health care fraud investigations are conducted simultaneously.
“These cases are large and complex from both a legal and factual standpoint,” said Andrew Sparks, Chief of the Fraud Unit. “They have taken time to investigate, but those efforts are paying off.”
U.S. Attorney Harvey observed that several of the cases resolved this year involved allegations of medically unnecessary procedures and other unsafe medical practices, which can pose serious health risks.
“These cases are not just about dollars and cents; they are also about patient safety and quality medical care,” said U.S. Attorney Harvey. “Where appropriate, this office can and will use federal laws and resources to hold accountable those health care providers that put their bottom line above their patients’ interests.”
Each of the 2014 settlements resolves allegations that health care providers violated the False Claims Act by submitting false or fraudulent claims to Medicare or Medicaid. That federal statute allows the government to recover up to three times the amount of monetary loss caused by the fraudulent conduct. Several of the settlements included a separate Corporate Integrity Agreement between the defendant and HHS, which allows for greater government oversight of the health care provider’s quality of service, billing, and compliance practices.
Harvey emphasized the ongoing nature of the Department’s health care fraud efforts and the importance of public awareness of potential fraud.
“We are not resting on our laurels with these settlements, and have added additional resources to our health care fraud group over the last few months,” said Harvey. “However, we can only investigate what we know about, and I would encourage those members of the public who are aware of potential fraud to report it through appropriate channels, whether at their workplace, through the HHS fraud hotline, or at our office.”
Below is a list of some of the significant civil health care fraud settlements in 2014.
U.S. vs. Saint Joseph London Hospital: The hospital agreed to pay the federal government $16.5 million to settle allegations that it billed Medicare and Medicaid for highly invasive and medically unnecessary cardiac procedures.
U.S. vs. Mullali: A Somerset, Ky., oncology center agreed to pay the government $2 million to settle allegations that the oncology practice had purchased cheap, foreign chemotherapy drugs that were not approved by the FDA. The drugs were used on patients, and then the oncology center billed the services to Medicare as if the drugs were the FDA-approved versions.
U.S. vs. PremierTox: A chain of opiate addiction recovery centers, and a clinical laboratory along with two physician owners agreed to pay the government $15.75 million to settle allegations that they fraudulently billed federal health care programs for urine tests that were unnecessary and excessive.U.S. vs. King’s Daughters: The Ashland Hospital agreed to pay $40.9 million, plus interest, to settle allegations that it had billed Medicare and Medicaid for invasive and medically unnecessary heart procedures as well as allegations of significant Stark Law violations.