In a recent announcement by the Department of Justice, two London, Kentucky-based cardiologists have agreed to pay $380,000 to settle claims of improper financial relationships with nearby St. Joseph Hospital – including unlawful kickbacks and allegations of financial inducements for referrals. Under the False Claims Act and federal Stark Law, physicians and healthcare professionals are prohibited from engaging in certain lucrative arrangements under the assumption that an underlying financial incentive may taint doctor-patient advice and prevent patients from receiving a referral based solely on what is in their best interests. As we have discussed in previous posts, allegations of kickbacks can quickly expose a physician or hospital management group to liability under the False Claims Act, which allows for treble damages if warranted.
Details of case against United States ex rel. Jones, Hollingsworth, and Rukavina v. St. Joseph Health System et al.
The case against St. Joseph Hospital and cardiologists Satyabrata Chatterjee and Ashwini Anand was initiated by three cardiologists who opted to exercise their whistleblower rights under the False Claims Act’s qui tam provisions – which provides whistleblowers the opportunity to collect up to 30 percent of the ultimate verdict or settlement.
According to allegations, the two cardiologist-defendants jointly owned the Cumberland Clinic, which provides cardiology services to the London, Kentucky, community. Chatterjee and Anand entered into “sham” agreements with St. Joseph Hospital, agreeing to provide “management services” – which were never actually provided. In exchange for the agreement to provide such services, Chatterjee and Anand agreed to exclusively refer cardiology patients to St. Joseph for surgical procedures, diagnostic testing, and any other cardiology-related medical services required by Cumberland Clinic patients.
Many of Chatterjee and Anand’s patients were covered by government healthcare programs, including Medicare and Medicaid. As such, the unlawful kickback arrangement between the doctors and St. Joseph Hospital triggered the False Claims Act and Stark Law once claims for reimbursement were made to these programs.
In addition to the agreement to pay $380,000 to the government, Chatterjee and Anand have agreed to enter into an Integrity Agreement whereby both doctors will be strictly monitored for compliance with federal regulations and guidelines – including an independent third-party review of all Medicare and Medicaid claims over the next three years.
Government responds to settlement
Healthcare fraud is one of the top concerns facing the federal government today, and it has implemented an increasing number of safeguards against this wasteful and costly misconduct. Acting Assistant U.S. Attorney General Joyce R. Branda commented:
“Physicians who place their financial interests above the well-being of their patients will be held accountable….The Department of Justice is committed to preventing illegal financial relationships that undermine the integrity of our public healthcare programs.”
U.S. Attorney Kerry Harvey, serving the Eastern District of Kentucky, commented:
“Financial relationships between healthcare providers that put profits over patients are a threat to the programs upon which millions of Americans depend….We will continue to use all the tools available to us to safeguard our federally funded healthcare programs from those who seek to profit from them through illegal means.”
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