Second Cardiologist Found Guilty in Federal Court for Performing Unnecessary Cardiac Procedures at St. Joseph London Hospital.

Dr. Anis G. Chalhoub, formerly a cardiologist at KentuckyOne Health’s St. Joseph London Hospital, was indicted in Federal Court in June, 2016 for allegedly performing unnecessary cardiac procedures.  A jury trial concluded last Wednesday with a finding of guilty on all 12 counts.  (United States District Court, Eastern District of Kentucky, London. Criminal Case No. 16-cr-23).  I do not yet have many court documents, but one of the counts must have been related to the civil lawsuit in Laurel County against St. Joseph and Catholic Health Initiatives which awarded a record $21.2 million to a Corbin man for unneeded surgical heart procedures at the London Hospital. (That case is still being appealed.)  Dr. Chalhoub currently holds a valid medical license in Kentucky and practices in Louisville and Southern Indiana.

[Addendum April 17, 2018:  The Department of Justice released today a notice of the conviction with some additional details. The story was also reported this morning in the Lexington Herald.  This latter notice reported that Dr. Chalhoub was convicted on a single count rather than the 12 counts noticed to to me. I will correct this article when I can reference the original court documents.] Continue reading “Second Cardiologist Found Guilty in Federal Court for Performing Unnecessary Cardiac Procedures at St. Joseph London Hospital.”

Another Kentucky Invasive Cardiologist Facing Possible Jail Time.

A reader shared a notice that the Ashland doctor at the center of the angioplasty-abuse scandal at King’s Daughters Hospital was indicted by a federal grand jury for allegations of performing unnecessary cardiac stent procedures and associated billing fraud. If found guilty, he faces up to 15 years of prison and financial restitution and penalties. Dr. Richard E. Paulus allegedly participated in this scheme from at least 2008 when he sold his practice to King’s Daughters Hospital until 2013 when he retired. He preformed more cardiac stent placements than any other physician in Kentucky, and placed his hospital among the highest in the nation for the number of such procedures.

In 2014 King‘s Daughters had settled with the Justice Department for $40.1 million to resolve claims of false billing for medically unnecessary cardiac procedures.  This new criminal indictment of a physician involved represents another dimension of that investigation. Other civil and probably criminal actions are proceeding. Dr. Paulus has not yet had a trial and should be considered innocent until then. In previous federal settlements with the two Kentucky Hospitals accused of false billing for cardiology services, the parties were not required to admit guilt.  What are we to think? How bad is this?  Is it nothing more than reckless billing or perhaps over-aggressive law enforcement? I don’t think so and offer the following thoughts as opinions. Continue reading “Another Kentucky Invasive Cardiologist Facing Possible Jail Time.”

Corporate Integrity Agreement in Angioplasty Abuse Case.

What comes after the fines? Which is worse?

Now that the initial round of federal legal proceedings against St. Joseph Hospital London and King’s Daughters Medical Center (KDMC) over false billing, improper financial relationships with physicians, or provision of unnecessary cardiac services has closed, I have largely lost track of where things stand. Civil proceedings by patients against the hospitals and several physicians are ongoing in Boyd and Laurel County courts where plainiff and defense attorneys have been busy.  Surely the federal monetary settlements and ongoing lawsuits have damaged the reputations and finances of the two institutions. The heavily promoted cardiac surgery program in London was closed. Cardiac patient volumes at KDMC have fallen to the point that they are referred to as an issue in its bond ratings. At least one physician working at St. Joseph London was sentenced to prison. Two other physicians from that hospital recently signed settlements of their own with the U.S. Department of Justice paying $360,000 to settle allegations that included payments for illegal referrals and having entered “sham agreements” that concealed their financial relationships with St. Joseph. Other hospitals and physicians that have similar contractual relationships must certainly be scrambling to make repairs. Continue reading “Corporate Integrity Agreement in Angioplasty Abuse Case.”

King’s Daughters Hospital Finalizes Angioplasty-Abuse Settlement.

The Verdict is In– Or Is It?

[See Addendum below.]

The agreement between King’s Daughters Medical Center and Hospital and various government investigatory and prosecutorial agencies to settle claims that the hospital submitted improper bills to Medicaid and Medicare has finally been signed. Not that we did not see it coming. A Kentucky record-setting amount of least $40.9 million now flows back into public coffers. Perhaps some of the money also goes into the pockets of a whistle-blower– I am waiting for the actual settlement text.

Has justice been done? If we believe the U.S. Attorney and the FBI agent on the case– surely!  Settlement language stated or implied that King’s Daughters “knew, deliberately ignored or recklessly disregarded the fact” that its cardiologists were putting things inside their patients’ hearts who did not need them; that some doctors were in effect being over-paid to submit their patients to what I have termed angioplasty abuse; that the hospital and its doctors were stealing money from patients and taxpayers; and that motivated by financial gain, public confidence in our healthcare system was threatened. Tough talk indeed.

On the other hand, the hospital admits no wrongdoing and in its statements gives me the [probably intended] impression that it is doing its community a favor by not squandering further valuable resources over allegations on “old cases.” I guess we are supposed to just let sleeping (or injured) dogs lie. The hospital points to external reviews that are said to confirm that it is meeting national standards in at least some aspects. [I have written much already of my growing lack of faith in some such hospital-rating organizations– at least the commercial ones that charge hospitals for the privilege of being evaluated or which charge the hospitals to use their ratings ratings in advertising!] Continue reading “King’s Daughters Hospital Finalizes Angioplasty-Abuse Settlement.”

Troubles Persist at King’s Daughters Hospital.

Settlement proceedings with federal agencies ongoing.

A measure of the difficulty facing our Louisville Hospitals.

Last March I gave an update on the struggle of King’s Daughters Hospital in Ashland, KY to recover from the abrupt decrease in patient volume and income following the disclosure of a Federal investigation of their cardiac program. Several years of financial boom and building turned into a bust of multi-million dollar losses and a downgrading of their bond rating. A paragraph in their FY2013 Audit led me (and pretty much everyone else) to believe that the hospital had reached a settlement with the Department of Justice and Inspector Generals’ offices. My efforts to obtain a copy of the settlement from Kentucky authorities was unfruitful despite apparent cooperation with my request. A report in today’s Modern Healthcare gives the reason why as well as an interim financial update.

The jury is still out!
In fact, settlement discussions were indeed in progress but are not final. The $48.9 million mentioned in the footnote of the audit referred to a reserve set aside to cover any fine and associated legal costs. The Hospital corrected the misleading language.

“Standard accounting principles require a reserve be set to reflect potential exposure for legal matters once the amount can be reasonably determined. Unfortunately this accrual was reflected in the audit footnote disclosure as though a final settlement agreement had been executed. While it is true King’s Daughters has been in ongoing negotiations with the Department of Justice, a final settlement has not occurred. King’s Daughters will update this notice if a final settlement with the Department of Justice is reached.”

Ongoing losses despite some improvements.
As of March 2014 the hospital reported a 13.5% decrease in admissions and a 15.2% decline in patient days for the year. Meaningful savings in operating expenses were won and the state’s expanded Medicaid program led to a decrease in “self-pay” uninsured patients. These gains were lost to unspecified severance benefits, and consultant and legal fees. The hospital, like others, continues to pay a heavy price for its alleged angioplasty-misadventures. Continue reading “Troubles Persist at King’s Daughters Hospital.”

Catholic Health Initiatives Agrees to Pay $37 Million to Settle Class-Action Lawsuit for Angioplasty Abuse.

bemine2As reported in the Baltimore Sun last week, Catholic Health Initiatives (CHI) agreed to pay up to $37 million to settle civil claims of unnecessary coronary artery stenting at its St. Joseph Hospital in Towson, Maryland. The class action suit by some 273 patients was one of several federal and civil lawsuits against the hospital for the placement of, or billing for medically unnecessary invasive cardiac procedures beginning years before 2010. The settlement still needs the approval of court officials and an agreement of at least 60% of other plaintiffs to join the case. These and apparently other plaintiffs have the option not to join the settlement. The books are not obviously closed on the case. The Hospital’s principal invasive cardiologist, Mark G. Midei, is named in other open actions, but not this case.

Cost of doing business? Slap on the hand? Fair outcome?
Although this sounds like a lot of money, it amounts only up to $134,000 per patient before plaintiff’s attorneys take 40% and repayments are made to Medicare, Medicaid, and private insurance companies who paid for the “allegedly” unnecessary medical procedures. Frankly, I anticipated a higher penalty given my understanding of the severity of the “alleged” deeds. Naturally, as we have come to see in these cases, CHI admits no wrongdoing, presumably knuckling under to an alternative interpretation of heavy-handed litigation and to avoid further uncertainty and legal expense.

CHI settled earlier with the Federal Government for $22 million for illegal kickbacks. In May 2013, the Hospital settled confidentially with another 200 or so patients for unknown sums. CHI sold its unfortunately but inevitably-tainted hospital (but not its tort liabilities) to the University of Maryland in 2012. In my opinion, and based on what I have read from independent examination of the facts, including a US Senate investigation, I would not personally have visited the hospital for services. Regretfully, when all the facts in cases like this are kept from the public, confidence and trust can be lost for a long time. No one is served well, save perhaps attorneys for the plaintiffs. Continue reading “Catholic Health Initiatives Agrees to Pay $37 Million to Settle Class-Action Lawsuit for Angioplasty Abuse.”

Major Settlement Between King’s Daughters Hospital and U.S. Department of Justice.

A $40.9 million settlement over issues of unnecessary cardiac catheterizations and coronary stents was apparently reached last February. Is it final yet?

Modern Healthcare reported yesterday on additional bad news for King’s Daughters Medical Center, including a $40.9 Million-plus settlement with the U.S. Department of Justice related to unnecessary cardiac procedures. The following language comes from the Medical Center’s annual independent audit for the fiscal year ending September 2013, as released this March 14.

“In February 2014, the Medical Center and the United States of America, acting through the DOJ and on behalf of the Office of Inspector General (OIG-HHS) of the Department of Health and Human Services (HHS) (collectively the “United States”) and the Commonwealth of Kentucky, reached an agreement to settle the DOJ’s review related to unnecessary diagnostic cardiac catheterizations and coronary stents. Under the terms of the agreement, the Medical Center will pay $40.9 million (“Settlement Amount”) to the United States. Interest will accrue on the Settlement Amount at the simple rate of 2.5%. Accordingly, $40.9 million is included in the current accrued governmental settlement at September 30, 2013 for the Settlement Amount. An additional $8 million has been included in the current accrued government settlement at September 30, 2013 for legal fees associated with the investigation and settlement. In addition to the settlement, the Medical Center will enter into a Corporate Integrity Agreement with the OIGHHS.”

Little or no news about the settlement.
I find no announcement of any settlement as of this morning on the websites of the Eastern District US Attorney, King’s Daughters Medical Center, or Kentucky’s Inspector General. I will try to ask for such. Apparently there was an additional settlement in September, 2013 of which I have no other details. Can anyone help? Continue reading “Major Settlement Between King’s Daughters Hospital and U.S. Department of Justice.”

St. Joseph’s London Discontinues Coronary Artery Bypass Surgery.

St. Joseph’s London Hospital has notified the state that it will no longer perform coronary artery bypass graft surgery (CABG), the traditional open-chest cardio-thoracic surgical procedure used to restore blood flow to the heart of people with severe coronary artery atherosclerosis. Before the advent of the the less invasive angioplasty and stenting, CABG was the main surgical approach to re-vascularization of a diseased heart. For certain combinations of coronary artery disease, and in some clinical settings, CABG remains the preferred approach today.

Why fewer invasive procedures?
In Kentucky, the frequency of both angioplasty and CABG have been gradually decreasing, presumably because the effectiveness of aggressive medical therapy is better recognized, and because research showed that the invasive approaches were being used in circumstances where they offered no advantage over non-invasive treatment. Treatment of coronary artery disease is lucrative for hospitals and physicians alike which unfortunately caused some to stretch the envelope beyond what could be justified medically, even to the point of fraud. That bubble is bursting and accounts for a some if not much of the overall decrease in invasive procedures.

Where will patients go?
The new plan in London is to transfer those patients requiring emergency surgery to one of the nearer hospitals capable of treating such a patient, presumably Pikeville, Hazard, Corbin, Asheville, Summerset, or Lexington. (Some of these hospitals perform fewer CABGs than in London!) For non-emergency surgery, patients will be referred to another KentuckyOne hospital– St. Joseph’s Lexington. Angioplasty and stenting will continue to be performed at St. Joseph’s London presumably with safeguards in place to make sure that the most appropriate procedure will be offered for medical reasons and not for convenience. Continue reading “St. Joseph’s London Discontinues Coronary Artery Bypass Surgery.”

The Other Boot Drops for Kings’s Daughters Medical Center.

Hundred’s of plaintiffs and a 70% drop in angioplasties.

kdmc-ptca-2012

We have known for some time that King’s Daughters Medical Center (KDMC) in Ashland Kentucky (Boyd County) has been under investigation by the Federal Department of Justice for the spectacular number of invasive cardiac procedures performed on its premises. In fact, the rate of angioplasties in that small city was one of the very highest in the nation and the highest in Kentucky. When other hospitals in Kentucky and elsewhere with seemingly anomalous high rates were looked at more carefully, it was found that that many, if not a majority of the procedures in some hospitals were not medically necessary or were even performed on normal or near-normal people!

The extent and progress of the federal investigation at KDMC is as yet unknown but it was not a complete surprise when a civil lawsuit was filed last September in Boyd County Circuit Court. It alleged that a medically unnecessary procedure with placement of a stent was performed in the hospital by its principal cardiologist, Dr. Richard E. Paulus, whose practice reportedly had been purchased by the hospital.

New lawsuits against King’s Daughters.
Earlier this week, a pair of related lawsuits listing some 42 pages of plaintiffs was filed against the hospital, Dr. Paulus, and a variety of business entities operating under the umbrella of the Kentucky Heart Institute. Naturally, a lawsuit tells only one side of the story, but given the precedent of essentially identical scenarios at other hospitals, including St. Joseph In Maryland and St. Joseph London here in Kentucky, the story is believable. The complaints themselves can be downloaded below. Continue reading “The Other Boot Drops for Kings’s Daughters Medical Center.”

Saint Joseph Health Care Settles Fraud Allegations: Analysis of Court Documents

Worse than I thought.

I prepared an earlier article about this settlement based on press releases from the U.S. Attorney’s Office and that of the FBI. I had slim hopes that more information would be available any time soon, but once again I was wrong. I subsequently obtained the full text of the Settlement, but also the recently-unsealed qui tam Relator’s Complaint to the court that started it all. The Complaint revealed a staggering degree of malfeasance with a parade of examples of medically unnecessary procedures extending beyond angioplasty alone to major cardiac surgery, and involving more than one St. Joseph Hospital. It also suggests the direction future prosecutions are going. The Settlement does not protect Saint Joseph Health System from future financial or programatic penalty as much as I expected. Both documents can be downloaded using the links provided above or at the end of this article.

Continue reading “Saint Joseph Health Care Settles Fraud Allegations: Analysis of Court Documents”