Kentucky-based King’s Daughters Medical Center Settles False Claims Act Allegations With $41 Million Payout

In a landslide victory for taxpayers, a Kentucky hospital found dabbling in expansive and costly healthcare fraud has agreed to pay $41 million to settle the allegations. According to reports, King’s Daughters Medical Center, located in Ashland, Kentucky, was engaging in the frightening practice of ordering and performing unnecessary heart procedures in order to boost revenues through Medicare and Medicaid reimbursements.

Startling Details of Case Against King’s Daughters Medical Center

The details of the case against KDMC reveal a concerning trend in the healthcare industry: a movement toward unnecessary, invasive, life-threatening procedures as a way to increase profits, and a step away from less serious false claims involving miscounting prescription drugs or billing for fake office visits. Unfortunately, today’s healthcare fraud involves dangerous heart catheterizations surgeries ordered for hundreds of patients who did not need the procedure – a procedure which runs the risk of causing bleeding, heart attack, stroke, kidney damage, infections, and blood clots.

According to the allegations, doctors at KDMC routinely ordered the insertion of stents and diagnostic catheterizations between 2006 and 2011, resulting in millions of dollars siphoned from state and federal healthcare programs. The lawsuit named the hospital, as well as individual doctors, for its role in the intentional and willful ignorance of the fact this practice was occurring in the cardiac unit. The hospital, allegedly, was involved in the falsification of medical records for purposes of covering up the fact the patients did not actually need the procedure.

Dr. Richard Paulus, after whom the KDMC coronary center is named, is under investigation for his role in the cover-up and fraudulent activity. A twenty-year veteran of KDMC, Dr. Paulus was known for his work ethic and an apparently tireless attention to his cardiac patients. However, the FBI and Kentucky’s Office of Attorney General are continuing their inquiry into the propriety of many of Dr. Paulus’ cardiac procedures.

In addition to the hospital’s role in falsely billing Medicare and Medicaid for unnecessary cardiac procedures, it has also agreed to settle claims it was involved in unlawful kickbacks with doctors – allegedly paying excessively high salaries in exchange for a promise to refer patients to the facility. This practice is likewise prohibited by the False Claims Act and Anti-Kickback Statute as it unfairly distorts the patient’s perception of the physician’s referral.

Government’s Response

Understandably, government officials did not take too kindly to the notion of doctors performing unnecessary heart surgeries in order to profit off of federal and state taxpayers. The settlement represents approximately double the amount KDMC received during its fraudulent catheterization practice. FBI agent Perrye Turner remarked, “The level of funds involved in this matter is staggering. This money has been stolen from the patients and the taxpayers.”

In a statement by the hospital, it described the allegations as “not well-founded.” It asserts its decision to settle the matter was not based on wrongdoing, but on a sincere motivation to cease draining resources “related to old cases.”

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