East Kentucky hospital pays $16.5 million for allegations of unnecessary cardiac procedures

by Ben Vernia | January 29th, 2014

On January 29, the Department of Justice announced that St. Joseph Health System, Inc., has agreed to pay $16.5 million to settle allegations that its London, Kentucky, hospital, St. Joseph’s, had billed federal and state health care programs for unnecessary cardiac procedures. According to DOJ’s press release:

Saint Joseph Health System Inc. has agreed to pay $16.5 million to resolve allegations that Saint Joseph Hospital violated the False Claims Act by submitting false claims to the Medicare and Kentucky Medicaid programs for a variety of medically unnecessary cardiac procedures, the Justice Department announced today. Saint Joseph Health System operates numerous hospitals statewide, including Saint Joseph Hospital, which is based in London, Ky.

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The government alleged that doctors working at Saint Joseph Hospital performed numerous invasive cardiac procedures, including coronary stents, pacemakers, coronary artery bypass graft surgeries and diagnostic catheterizations, on Medicare and Medicaid patients who did not need them, and that the hospital was aware of these unnecessary procedures. These doctors were affiliated with Cumberland Clinic which is a physician group that entered an exclusive arrangement with Saint Joseph Hospital in 2008 to provide cardiology services to the hospital’s patients. Cumberland Clinic is owned by two London-based cardiologists, Satyabrata Chatterjee and Ashwini Anand.

The settlement also resolves allegations that Saint Joseph Hospital violated the federal Stark Law and Anti-Kickback Statute by entering into sham management agreements that financially benefitted Chatterjee and Anand as an inducement for Chatterjee and Anand to direct more Cumberland Clinic patients to the hospital.

Dr. Sandesh Patil, one of the Cumberland Clinic cardiologists working at the hospital, performed many of the medically unnecessary coronary stents. Patil has since pleaded guilty to a federal health care fraud offense and has been sentenced to serve 30 months in prison.

The case was originally brought by three physician whistleblowers, who, the government announced, will share $2.46 million of the settlement (a 15% relator’s share).

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