MedStar Health to pay $35M settlement in kickback case

Legal
According to the Department of Justice, MedStar paid MidAtlantic Cardiovascular Associates kickbacks "under the guise of professional services contracts" for its referrals to MedStar Union Memorial of "lucrative cardiovascular procedures." (iStock/Pattanaphong Khuankaew)

Maryland-based MedStar Health has agreed to pay $35 million to settle allegations that it paid kickbacks to a cardiology group in exchange for referrals to two of its Baltimore hospitals. 

According to the Department of Justice, MedStar paid MidAtlantic Cardiovascular Associates (MACVA) kickbacks "under the guise of professional services contracts" for its referrals to MedStar Union Memorial of "lucrative cardiovascular procedures" between 2006 and 2011. 

The DOJ alleges these contracts were in violation of the anti-kickback statute of the False Claims Act.

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“Kickbacks give doctors an incentive to pursue unnecessary treatments that are costly and sometimes even dangerous to patients,” said U.S. Attorney Robert K. Hur. “We will not tolerate medical care providers who put their patients at risk and waste taxpayers’ dollars in order to line their own pockets.”

RELATED: Hospitals to OIG: Please give us anti-kickback safe harbors for value-based care

MedStar also agreed to settle allegations that it received Medicare payments between 2006 and 2012 for medically unnecessary stents performed by John Wang, M.D., a one-time employee of MACVA who was later employed by MedStar.

The settlement resolves a lawsuit brought in 2010 by several cardiac surgeons who practiced at Cardiac Surgery Associates in Baltimore who served as whistleblowers. It also resolves a lawsuit brought by former patients of Wang who claimed he engaged in a pattern of performing medically unnecessary cardiac stent procedures and submitted false claims to Medicare for them.

RELATED: In whistleblower lawsuit, former CHS executives allege EHR had pervasive, dangerous flaws

"While we deny all wrongdoing, we fully cooperated with the government’s investigation of these matters and ultimately determined that it was best to settle these matters in order to avoid protracted and distracting litigation," MedStar officials said in an emailed statement. "Importantly, the two cases have been settled without any findings of liability.  MedStar has full confidence in our quality assurance and compliance programs, and we remain fully focused on advancing our patient care mission."

The whistleblowers will receive a portion of the federal share of the $35 million settlement.

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