Maryland Medical Center Settles False Claims Act Suit


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The United States is getting paid $22 million to settle a False Claims Act suit thanks to whistleblowers Stephen D. Lincoln, M.D.; Peter Horneffer, M.D.; and Garth McDonald, M.D. These cardiac surgeons practiced together as members of Cardiac Surgery Associates in Baltimore. The qui tam suit was filed against St. Joseph Medical Center in Towson, Maryland.

The False Claims Act allegations revolve around unlawful remunerations under the Anti-Kickback Act and violations of the Stark law stemming from a series of professional services contracts with the Pikesville, Md., based cardiology group, MidAtlantic Cardiovascular Associates (MACVA).

According to the whistleblowers, from January 1, 1996 to January 1, 2006 kickbacks were paid to MidAtlantic in the guise of professional service agreements in return for MACVA’s referrals to St. Joseph for lucrative cardiovascular procedures, including cardiac surgery and interventional cardiology procedures. A total of 11 professional service agreements were resolved in the settlement. These agreements included unlawful actions such as payments above fair market value, services not rendered or not commercially reasonable for the purposes of inducing referrals.

Mark Midei, MD. Was involved with both defendants and performed unnecessary medical stents in 2008 and 2009. The allegations resulting from his actions have resolved by the settlement as well. 600 of his past patients have received letters from the Department of Justice informing them that the stents they received may have been unnecessary. Typical procedure is to use a stent, at the average cost of $10,000, to treat 70% heart blockage. Some patients had as little as 10% blockage and were still implanted with the costly and profitable stents.

3 agents and 2 attorneys worked on the case. Said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice, “Kickbacks for medical services undermine the integrity of our health care system.”

This whistleblower suit not only resulted in a $22 million settlement but also in preventative measures. St. Joseph signed a Corporate Integrity Agreement that will require oversight, review and peer evaluation to prevent future fraudulent activities. The three whistleblowers will be due millions of dollars from the settlement for taking the risks to set things right.



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