Consumer Fraud

Kentucky hospital agrees to pay $41 million for allegedly performing unnecessary heart procedures

osha whistle Kentucky hospital agrees to pay $41 million for allegedly performing unnecessary heart proceduresA Kentucky hospital has agreed to pay the U.S. nearly $41 million to settle allegations that it billed federal and state health care programs millions of dollars for medically unnecessary heart stents and diagnostic catheterizations and for violating anti-kickback laws by rewarding physicians for referrals. The case is likely the largest ever in the U.S. involving fraudulent claims for unneeded heart procedures.

King’s Daughters Medical Center in Ashland, Ky., part of the Ashland Hospital Corp., will pay $40.9 million to resolve the allegations, the U.S. Justice Department said.

The U.S. alleged that King’s Daughters Medical Center billed Medicare and Kentucky’s Medicaid program for implanting heart stents and performing invasive diagnostic tests on patients who didn’t need either of the procedures.

After performing the procedures, the hospital and the physicians involved in the scheme would falsify patients’ medical records to mask the fact that the procedures were unnecessary, the U.S. alleged.

The Justice Department said that the hospital carried out the scheme between 2006 and 2011, compromising the health and well being of patients for financial gain.

“The conduct alleged in this matter is unacceptable, victimizing both taxpayers and patients,” said Kerry Harvey, U.S. Attorney for the Eastern District of Kentucky. “Treatment decisions motivated by financial gain undermine public confidence in our health care system and threaten vital federal programs upon which so many of our citizens rely.”

Additionally, the U.S. alleged that King’s Daughters Medical Center violated federal anti-kickback laws designed to prevent inappropriate financial relationships between physicians and health care companies that could diminish the quality of care patients receive by prioritizing profits.

Perrye Turner, special agent in charge of the FBI’s Louisville field division, said in a statement that, “the level of funds involved in this matter is staggering. This money has been stolen from the patients and the taxpayers.”

The settlement does not resolve lawsuits brought against the hospital and its coronary unit by about 520 patients who allegedly received unnecessary heart procedures, nor does it let the hospital or its physicians off the hook for criminal charges.

The massive settlement comes just after another case of Medicare fraud the Justice Department announced in January involving KentuckyOne / St. Joseph hospital in London, Ky. That agreement resolved allegations brought under the False Claims Act by three physicians-turned-whistleblowers who alleged the hospital was performing medically unnecessary cardiac procedures on patients and then billing federal health care programs for them. The whistleblowers also exposed a widespread practice of providing kickbacks to physicians in exchange for referrals.

KentuckyOne / St. Joseph paid the U.S. $16.5 million the resolve the whistleblower allegations. Like King’s Daughters Medical Center, KentuckyOne / St. Joseph also faces hundreds of lawsuits from patients who may have undergone unnecessary heart procedures.


U.S. Department of Justice