The Health Alliance of Greater Cincinnati and one of its former members, The Christ Hospital (Hospital), have agreed to pay the United States $108 million to settle a whistleblower lawsuit alleging that the Hospital was improperly assigning panel time in its outpatient cardiology testing unit based on the volume of referrals cardiologists made to the Hospital. The massive sum is one of the largest awards ever collected from a hospital or health system under the federal False Claims Act (FCA).
The Government's allegations centered on the scheduling of time at the Hospital's Heart Station, an outpatient facility for non-invasive, diagnostic cardiovascular tests such as electrocardiograms, echocardiograms and stress tests; where, according to the Government, cardiologists could both recruit new patients and earn additional income reading tests. In its May 21, 2010 press release, the Department of Justice claimed that only cardiologists whose referrals contributed to at least 2% of the Hospital's yearly gross revenues were granted a corresponding percentage of time at the Heart Station, in violation of the federal Anti-Kickback Statute and FCA.
The allegations first emerged over seven years ago in a whistleblower lawsuit filed in March 2003 by a former cardiologist at the Hospital. In 2008, the Government intervened, alleging that The Health Alliance and the Hospital, with the assistance of Ohio Heart, the largest cardiology group in the area, improperly rewarded cardiologists who otherwise generated revenue for the Hospital with a proportional amount of time at the Heart Station.
According to the Government's complaint, filed in July 2008, cardiologists who referred patients to the Hospital for coronary arterial bypass graphs or other interventional cardiology procedures received a proportional amount of time working in the Heart Station. Specifically, the Government alleged that the Hospital collected data on the amount of revenue generated from referrals from each cardiologist or cardiology group for certain Diagnosis-Related Group (DRG) codes pertaining to these procedures. The Hospital would then allegedly compare the individual cardiologist's or cardiology group's revenues for those DRG codes with the Hospital's total amount of revenue associated with the same codes. According to the Government, the resulting percentage would then be used to assign panel time at the Heart Station. So, if a cardiology group generated 80% of the Hospital's revenue for a certain code, the group was assigned 80% of the time at the Heart Station. This practice allegedly began in 1997 and continued until 2004, when the Hospital was made aware of the Government's investigation.
The Justice Department press release announcing the settlement states that the Hospital declined to enter into a Corporate Integrity Agreement acceptable to the OIG and further claims that the OIG is further evaluating the matter.
Although the settlement leaves many questions unanswered, it could raise doubts about preferential scheduling practices currently in place in other hospitals. Hospitals should consider taking steps to carefully review their own scheduling policies and decisions to ensure compliance with applicable laws.
If you have any questions, please do not hesitate to contact Scott Taebel at (414) 721-0445 or via email at staebel@hallrender.com or Ben Fee at (414) 721-0467 or via email at bfee@hallrender.com.
