Consumer Fraud

Kentucky hospital settles whistleblowers’ fraud allegations for $16.5 million

osha whistle Kentucky hospital settles whistleblowers’ fraud allegations for $16.5 millionA group of whistleblowers who filed a complaint under the U.S. False Claims Act against a Kentucky hospital system was instrumental in helping the federal government recover millions of dollars that were allegedly taken from it in schemes to defraud Medicare and Kentucky Medicaid programs, the U.S. Justice Department said.

Saint Joseph Health System Inc. has agreed to pay $16.5 million to resolve the whistleblowers’ allegations that it charged the government health care programs for medically unnecessary cardiac procedures in an effort to boost profits – a scheme that amounted to the submission of millions of dollars in false claims.

Saint Joseph Health System operates numerous hospitals throughout Kentucky, including Saint Joseph Hospital in London, Ken., where the alleged fraud occurred.

The government intervened in the whistleblower lawsuit, which it is entitled to do. Whistleblowers who file a complaint on behalf of the U.S. under the qui tam provisions of the False Claims Act receive a percentage of the recovery whether or not the government becomes directly involved in the lawsuit.

According to the lawsuit, doctors working at Saint Joseph Hospital performed numerous invasive cardiac procedures, including coronary stents, pacemakers, coronary artery bypass graft surgeries, and diagnostic catheterizations on Medicare and Medicaid patients who did not need them. The lawsuit alleged that the hospital was aware of the unnecessary procedures but did nothing to stop them.

The settlement also resolves allegations that Saint Joseph Hospital violated the federal Stark Law and Anti-Kickback Statute by entering into sham management agreements that financially benefited two cardiologists who crafted the fraud scheme.

“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart Delery. “The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk.”

Drs. Michael Jones, Paula Hollingsworth, and Michael Rukavina will receive a total of $2.46 million of the $16.5 million settlement for their role in helping expose the fraud at St. Joseph Hospital.


U.S. Department of Justice