1. Christ Hospital.

Cardiology and Cardiovascular ? Hospital Relationships -- False Claims, Stark Act and Anti Kickback Investigations -- A Target Area for the Government ? 7 Recent Cases and

Settlements

By: Scott Becker and Lindsey Dunn

Over the last several years, there has been no area of medicine where the government has launched more investigations, whether false claims, anti kickback or Stark, than in the cardiovascular area. This makes sense when you realize that the government often targets areas where its spending is high. In essence, the government is involved in a cost benefit investigation game and targets investigative resources where there is significant money to be recovered.

The direct and indirect costs associated with cardiovascular disease are estimated to reach $503.2 billion dollars in 2010, with an estimated $110.2 million of that total going toward direct hospital costs, according to the American Heart Association. Additionally, nearly 25 percent of all hospital costs paid by the government are cardiovascular related, by some estimates,

Professional fees for cardiologists also rank highly among medical specialties. The average income for a cardiologist in 2008-2009 for a non invasive cardiologist was approximately $420,000 to $450,000, and the average income for invasive interventional cardiologists was approximately $530,000 to $550,000, according to various studies. In many situations, cardiology practices with ancillary income can make much greater amounts. This makes cardiologists, after neurosurgeons and possibly orthopedic surgeons, the highest paid physicians, on average, among all specialties.

From a government targeting perspective this in total means that cardiologists become very significant targets of investigations that might return money to the government. As a result, we have seen a number of settlements and, in some cases guilty pleas, over the past several years by hospitals and/or cardiologists. This article briefly discusses seven such cases.

1. Christ Hospital. Here, a qui tam suit was brought forth by a cardiologist alleging the Cincinnati hospital and Ohio Heart Health Center, the largest cardiology group in the area, conspired to devise a scheme that would provide improper incentives to the group's cardiologists in exchange for referring patients, including Medicare beneficiaries, to the hospital. The government intervened in the suit, which alleged that between 1999 and 2004 cardiologists were allocated time at the hospital's "Heart Station" -- a center where patients receive non-invasive procedures such as electrocardiograms and stress tests -- based on the number of coronary arterial bypass graph procedures and catheter lab revenues they or their group generated during the previous year.

The hospital and Health Alliance of Greater Cincinnati, of which the hospital was an affiliate at the time the inappropriate incentives were alleged, recently settled with the government for an undisclosed sum. Here, it believed that settling reduced the risk facing the hospital, which acquired Ohio Heart in 2008, and Health Alliance given the potentially 100,000 different violations, and $11,000 per claim plus triple damages. The hospital states that settling helped it avoid possible billon dollar damages.

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2. University of Medicine and Dentistry of New Jersey's University Hospital. A second set of cases involves cardiologists and UMDNJ University Hospital in Newark, N.J. Here, the government alleged that beginning in 1995 the hospital illegally paid kickbacks to cardiologists in exchange for referring patients to the hospital thereby causing the submission of false claims to Medicare. The government alleged that the hospital experienced a drop in certain cardiac procedures that jeopardized the hospital's Level 1 Trauma Center status. As a result, the hospital allegedly provided local cardiologists contracts for part-time employment, which the government alleged only served as vehicles to provide illegal kickbacks. Here, the suits were a result of a federal investigation brought forth after a federal monitor at UMDNJ alleged in 2006 that the hospital had been illegally paying kickbacks.

Physicians with part-time employment contracts received as much as $120,000 annually, and in each situation the government has alleged that there was essentially very little actual services performed in exchange for those salaries.

UMDNJ University Hospital settled with the government in Sept. 2009 for $8.3 million. Nine individual cardiologists have also settled with the government for accepting the kickbacks. Individual physician settlement reached as much as $360,000.

3. McAllen, Texas, Cardiologist. Fabian Aurignac, MD, the owner and operator of Cardiology Care Center in McAllen, Texas, was arrested in Dec. 2008 for defrauding Medicare and Medicaid of more than $1 million. Dr. Aurignac pleaded guilty in May 2009, admitting that he submitted false and fraudulent claims to the programs by billing for services not rendered or billing for procedures performed by unqualified medical personnel.

Dr. Aurignac was sentenced to 57 months in prison and forced to pay a $20,000 fine in addition to paying back the more than $1 million in payments he received through the submission of false claims.

4. Genesys Health System. Here, a qui tam lawsuit against Grand Blanc-Mich.-based Genesys Health System, in which the government later intervened, alleged that between 2001 and 2007, Genesys violated the False Claims Act by billing Medicare for higher levels of service than were actually rendered to patients. Specifically, the government alleged that Genesys overbilled for evaluation and management services provided to cardiology patients.

Genesys resolved the allegation in Dec. 2009 by agreeing to pay $669,413 to the U.S. government.

5. Eugene, Ore.,Cardiologists. Four cardiac surgeons in Eugene, Ore. -- Stanley Baldwin, MD; Richard Hicks, MD; Warren Glover, MD; and David Duke, MD allegedly over-billed federally funded healthcare programs by approximately $1.25 million between 1993-2004 for the use of a second assistant surgeon during cardiovascular surgeries in cases where the assisting surgeon never actually provided assistance or was not present in the OR. The government launched an investigation into the surgeons' claims, reviewing more than 4,000 cases performed by the surgeons -- who were all members of Cardiovascular Surgical Associates -- at Sacred Heart Medical Center.

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The four surgeons settled for approximately $2.5 million dollars to resolve the allegations.

6. East Tennessee Heart Consultants. Here, East Tennesee Heart Consultants, a 42physician cardiology practice in Knoxville, Tenn., was investigated by the U.S. government for failing to refund overpayments by Medicare and Medicaid over a six-year period. The investigation followed a qui tam lawsuit brought forth by two employees of the practice's billing department alleging that the practice had a policy to not refund overpayment by government programs unless specifically asked. The government claimed the failure to refund the overpayments despite knowing it was legally required violated the False Claims Act.

The practice resolved the investigation in 2007 by agreeing to pay approximately $1.5 million dollars to the Department of Justice. The group also agreed to pay $200,000 to the state of Tennessee and $1.2 million to patients and their private health plans.

7. St. Joseph Medical Center. In this case, St. Joseph Medical Center in Towson, Md., went through an investigation by HHS's Office Inspector General regarding its relationship with the largest cardiology group in the area. MidAtlantic Cardiovascular Associates. Here, MidAtlantic Cardiovascular Associates was described as the 1,000-lb gorilla in the area controlling nearly $70 to $80 million dollars in hospital billings, and the investigation intended to examine if any improper financial relationships existed between the hospital and the practice. Specifically, the government was looking into the hospital's hiring of two of the practice's physicians, which resulted in the withdrawal of a nearly $25 million offer from competing Union Memorial Hospital in Baltimore to acquire the practice. If the practice was acquired by the competitor, this would have ostensibly led to decreased cardiology revenues for St. Joseph.The investigation led to three of the top executives of St. Joseph resigning from the system, and the hospital settled with the government in July 2009 to resolve the allegations without admitting liability in order to, according to the hospital, avoid litigation costs.

The problems at St. Joseph, however, continue to make headlines. Earlier this year, the hospital notified hundreds of patients that they may have undergone unnecessary procedures for coronary implants. All the patients notified were patients of Mark G. Midei, MD. -- one of the physicians hired away from MidAltantic by St. Joseph. Dr. Midei abruptly stopped practicing and lost his privileges at the hospital last summer, following the investigation.

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The investigations and settlements discussed here help to clarify why it is so important that relationships both financial and legal between hospitals and cardiologists be undertaken with great care. It also further strengthens the view that there must be careful and annual billing and coding audits with respect to cardiology practice and cardiovascular billing.

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