Catholic Medical Center Agrees to Pay $3.8 Million to Resolve Kickback-Related False Claims Act Allegations

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FILE PHOTO: The U.S. Supreme Court stands in Washington

 

            CONCORD – United States Attorney John J. Farley announced today that Catholic Medical Center (CMC) has agreed to pay $3.8 million to resolve allegations that it violated the civil False Claims Act by providing free call coverage services to a cardiologist to induce patient referrals, in violation of the Anti-Kickback Statute.

            According to the settlement agreement, the United States asserted that CMC, a hospital in Manchester, paid its own cardiologists to cover for, and to be available to provide medical services for, another cardiologist’s patients when she was on vacation or otherwise unavailable.  The United States further alleged that CMC provided these call coverage services at no charge. The cardiologist who received the free call coverage referred millions of dollars in medical procedures and services to CMC over the decade in which the free services were provided.  Because CMC submitted claims for payment to Medicare, Medicaid, and other federal health care programs for the services referred by the cardiologist, the United States alleged that these claims were the result of unlawful kickbacks.

            “The False Claims Act and the Anti-Kickback Statute protect patients and federal health care programs from fraud and abuse by removing the corrupting influence of money,” said U.S. Attorney Farley.  “When patients are referred for medical services, those referrals should be based solely on medical need and not affected by financial considerations.  We work closely with our law enforcement partners to protect the integrity of federal health care programs and we will use all appropriate enforcement tools to combat health care fraud in New Hampshire.”

            “Kickback schemes can undermine our healthcare system, compromise medical decisions, and waste taxpayer dollars.  As today’s settlement makes clear, the FBI will aggressively investigate those who seek to bolster their bottom line by paying illegal kickbacks—whether directly or indirectly—to circumvent safeguards designed to protect the integrity of federal health care programs,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.

            “Today’s settlement sends a clear message that these types of financial arrangements will not be tolerated. We will continue to work with our law enforcement partners to ensure that all medical providers properly follow health care rules and regulations,” said Phillip M. Coyne, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General. “I appreciate the partnership with the New Hampshire U.S. Attorney’s Office in identifying and prosecuting this type of fraud.”

            “Protecting TRICARE, the health care program for active-duty military personnel, retirees, and dependents, is a top priority for the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service (DCIS),” said Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office.  “When health care facilities submit claims to TRICARE for services that are driven by financial reasons and not strictly medical ones, it undermines the integrity of the TRICARE program.  Today’s settlement agreement demonstrates the DCIS’ ongoing commitment to work with the U.S. Attorney’s Office, District of New Hampshire, to investigate health care fraud.”

            The Anti-Kickback Statute makes it illegal for a hospital to pay physicians in exchange for referrals of government insured health care programs, such as Medicare, Medicaid, or Tricare.  It arose out of congressional concern that remuneration given to those who can influence health care decisions would result in the provision of medically unnecessary services, or services of poor quality or otherwise harmful to patients. 

            The False Claims Act permits whistleblowers to file civil lawsuits alleging that false claims have been submitted to the United States. This False Claims Act settlement resolves allegations originally brought in a lawsuit filed by a whistleblower, David Goldberg, M.D., a former CMC employee, who is represented by Douglas, Leonard & Garvey, P.C.  As part of the settlement the whistleblower will receive a portion of the settlement amount.

            CMC did not admit liability as part of this settlement agreement.


            This case was investigated by the Office of Inspector General of the U.S. Department of Health and Human Services, the Office of Inspector General of the Department of Defense, and the Federal Bureau of Investigation. The case was handled by Assistant U.S. Attorney Raphael Katz.

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