Medstar pays $35 million to settle whistleblowers’ kickback allegations

by Ben Vernia | March 22nd, 2019

On March 21, the Department of Justice announced that Maryland-based Medstar Health, Inc., had agreed to pay $35 million to settle allegations that the company’s hospitals paid a Maryland-based cardiovascular group kickbacks in order to receive referrals. According to DOJ’s press release:

MedStar Health Inc. (MedStar) in Columbia, Maryland., MedStar Union Memorial Hospital, and MedStar Franklin Square Medical Center, both in Baltimore, have agreed to pay the United States $35 million to settle allegations under the False Claims Act that it paid kickbacks to MidAtlantic Cardiovascular Associates (MACVA), a cardiology group based in Pikesville, Maryland, in exchange for referrals, through a series of professional services contracts at Union Memorial and Franklin Square Hospitals in Baltimore.

The settlement was announced by Assistant Attorney General Jody Hunt of the Justice Department’s Civil Division, United States Attorney for the District of Maryland Robert K. Hur;  and Special Agent in Charge Maureen Dixon of the Department of Health and Human Services, Office of Inspector General – Office of Investigations.

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The allegations resolved in the settlement include the payment of kickbacks to MACVA under the guise of professional services agreements, in return for MACVA’s referrals to Union Memorial of lucrative cardiovascular procedures, including cardiac surgery and interventional cardiology procedures, from Jan. 1, 2006, through July 31, 2011.Under the settlement MedStar also agrees to settle allegations that it received Medicare payments from Jan. 1, 2006, through Dec. 28, 2012, for medically unnecessary stents performed by John Wang, M.D., a one-time employee of MACVA who was later employed by MedStar.

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The government did not yet announce the amount the relators – in two separate suits – will receive from the settlement.

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