Saint Joseph Health System Inc., or Saint Joseph London Hospital, has agreed to pay $16.5 million to resolve healthcare whistleblower allegations that it submitted false claims to Medicare and Medicaid for a variety of medically unnecessary heart procedures. This is the second largest healthcare fraud settlement in the Eastern District of Kentucky.

According to the lawsuit, from 2008-2011, cardiologists Sandesh Patil, Ashwini Anand, and Satyabrata Chatterjee performed numerous cardiac (heart) operations on Medicare and Medicaid patients who did not need them. The hospital then billed Medicare and Medicaid for these unnecessary procedures, which included coronary stents, coronary artery bypass graft surgeries (CABGS), diagnostic catheterizations, and pacemakers.

Under the False Claims Act, it is unlawful for a company or individual to submit a false claim for payment from a government program, such as Medicare or Medicaid, or to cause another to submit a false claim for payment. These cardiac operations allegedly violated the False Claims Act because Medicare and Medicaid programs only reimburse health care providers for operations that are deemed medically necessary. (Generally, hospitals receive between $10,000 and $15,000 for medical procedures such as heart stents.)

This lawsuit also resolves allegations that Saint Joseph violated the Stark and Anti-Kickback laws by entering into agreements with doctors at the Cumberland Clinic, who provided the cardiology services to the hospital’s patients. These agreements allegedly served as an incentive for the doctors to refer patients to Saint Joseph.

The healthcare whistleblowers in this particular case were three cardiologists who filed their case under the qui tam provision of the False Claims Act. (This law allows the whistleblowers, also known as “relators”, to share in any monetary recovery that results from the case.) As board certified cardiologists practicing in Kentucky, they uncovered the healthcare fraud involving patients who unknowingly received false diagnoses and unnecessary procedures at Saint Joseph. In this instance, Dr. Michael Jones, Dr. Michael Rukavina, and Dr. Paula Hollingsworth will receive a total of $2,458,810 from the settlement.

The state of Kentucky is also entitled to a portion of the settlement, and will receive approximately $365,851, which represents the state’s share of the Medicaid funds that were recovered. (The Medicaid program in Kentucky is funded jointly by both the federal and state government.)

In addition to the $16.5 million civil settlement announced today, defendant Sandesh Patil previously pled guilty to criminal charges for falsely recording the severity of patients’ illnesses in order to receive payment for unnecessary heart procedures. Patil is currently serving 30 months in Federal prison.