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MedStar Health pays $35 million to settle cardiac kickback allegations

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Posted at 5:28 PM, Mar 21, 2019
and last updated 2019-03-21 17:28:43-04

BALTIMORE — Three MedStar Health facilities in Maryland have agreed to pay $35 million to the United States to settle allegations of a kickback scheme with a Pikesville cardiology group, the United States Attorney for the District of Maryland announced Friday.

MedStar Health Inc. in Columbia, and Medstar Union Memorial Hospital and Medstar Franklin Square Medical Center – both in Baltimore – agreed to the settlement under the False Claims Act, in which the facilities were accused of paying kickbacks, through professional services contracts at the two Baltimore Medstar facilities, to MidAtlantic Cardiovascular Associates (MACVA), in exchange for referrals, the U.S. Attorney’s Office said.

“Patients rightly expect their doctors will make recommendations based on sound medical practice — not payoffs that too often result in needless and sometimes even harmful procedures,” said Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue to protect patients and taxpayer-funded government health programs from these unnecessary services, as the government contended in this case.”

The allegations pertain to the payment of kickbacks, disguised as professional service contracts, to MACVA, in return for the cardiology group’s referrals of cardiovascular procedures, including cardiac surgery, to Union Memorial, the U.S. Attorney’s Office said. The alleged scheme ran from Jan. 1, 2006 until July 31, 2011. Highlighted in the settlement were allegations MedStar received Medicare payments for medically unnecessary stents from Jan. 1, 2006 to Dec. 28, 2012.

The settlement resolves two lawsuits brought by a groups of whistleblowers. One group of cardiac surgeons who practice together as members of Cardiac Surgery Associates in Baltimore filed their lawsuit in June of 2010. The other lawsuit, filed in December of 2012, was brought by patients of Dr. John Wang, claiming Wang performed “medically unnecessary percutaneous transluminal coronary angioplasty with stent placement procedures,” the U.S. Attorney's Office said, submitting false claims to Medicare for the stent procedures.

The False Claims Act allows private citizens acting as whistleblowers to bring suit on behalf of the United States against those who bring false claims against the government.