Department of Justice Seal



FRIDAY, JUNE 1, 2001

(202) 514-2007


TDD (202) 514-1888



WASHINGTON, DC - Seven hospitals located around the country have agreed to pay the United States $5,476,637 to settle claims that they unlawfully charged federal health care programs for surgical procedures using experimental cardiac devices, the Justice Department announced today.

The devices had not been approved for marketing by the Food and Drug Administration (FDA) at the time the procedures were performed between 1987 and 1994. The United States maintained that the hospitals violated the False Claims Act by knowingly seeking federal reimbursement for services when they knew that Medicare and TRICARE, the military health care program, considered the procedures to be non-reimbursable.

Holy Cross Hospital in Ft. Lauderdale, Florida, will pay $2,830,208. HCA - The Healthcare Company, which operated Green Hospital of Scripps Clinic in San Diego, California, until November, 1991, and also owned Healthwest Regional Medical Center in Phoenix, Arizona; West Florida Regional Medical Center in Pensacola, Florida; and Miami Heart Institute in Miami, will pay $1,929,255. South Miami Hospital will pay $450,000 and Mt. Sinai Hospital, also in Miami, will pay $267,174.

The government had previously entered into settlements with other hospitals engaged in similar conduct. These other settlements resulted in payments of almost $13 million.

"Taxpayer-funded health insurers have a right and a duty to set responsible limits on the goods and services they will pay for," said Acting Assistant Attorney General Stuart Schiffer. "The hospitals in this case disregarded clear government coverage limitations in order to bill federal health care programs for procedures that they knew were not reimbursable. The Justice Department intends to pursue other hospitals that have engaged in the same conduct."

The settlement announced today stems from a qui tam or whistleblower lawsuit filed by Kevin Cosens, a former medical device salesman. Under the False Claims Act, private citizens can bring suit on behalf of the government and share in any awards that are obtained through that legal action. Mr. Cosens will receive $1,095,327. His attorneys will also receive reimbursement for legal fees from the settling hospitals.

The government's investigation was conducted by the Civil Division of the Department of Justice; the United States Attorney's Offices in the Southern District of Florida, the Southern District of California, and the Western District of Washington; the Office of Inspector General of the Department of Health and Human Services, and the Defense Criminal Investigative Service.