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!]

We have heard this dialog before in other angioplasty abuse settlements. For one, it leaves me unsatisfied. Is the hospital getting rolled by an abusive big government and litigious society? Has the public been well served by at least being allowed to assume that that saving valuable hospital resources might be a reasonable justification for avoiding a adjudicated pubic exposition of what actually happened, or to provide proof that it is safe to go to that hospital? I am of the opinion that in this and in the previous cases that have come to a similar end, that the government’s case is both strong and believable, and that bad things were being done to good hearts because of the money that could be made. Certainly no reputable professional medical organization of which I am aware is rising up in defense of the doctors or hospitals involved. At least some physicians are losing their medical licenses and some are going to jail. It would be an unjust world indeed if the utility of saving hospital resources led to the individual and public prices being paid.

Good for the gander?
In the malpractice world of physicians, a case is being made for doctors to “come clean” and admit when they have done something wrong, or at least not to obscure the facts when a bad result has occurred. Some hospitals actively suggest that physicians do this.  I recognize that the fear that admission of a mistake, or that the telling of an unvarnished story will be used against oneself in a courtroom limits enthusiasm for such an approach. However, it is also true that lack of full disclosure robs patients of the fully informed consent necessary to guide future treatment and therefore represents a breach of professional ethics.  I suggest that the same standards that apply to physicians should apply to hospitals. I personally would want fuller disclosure before I decided where to go if I needed help.

I am struggling here to find a better way to close this article. In our imperfect world, and as exemplified by the settlement described above, this may be as good as it is going to get. Sadly, I predict that we are going to dance this unsatisfactory two-step a few more times before the music is over.

[Addendum, June 11, 2014:
I obtained a copy of the settlement. In structure and language, it is very similar to the settlement agreement reached with the KentuckyOne Health hospital– St. Joseph’s London. I suppose this is not surprising as the activities under investigation were similar.

The terms are essentially as discussed above. The United States indeed contends in no uncertain language that King’s Daughters Medical Center (KDMC) “knew, deliberately ignored, or recklessly disregarded the fact that cardiologists associated with or employed by KDMC… were performing unnecessary interventional cardiac procedures,” and were falsifying medical records “in order to create the appearance of a need for such procedures.”

It is asserted that false bills for payment for these unnecessary services were presented to Medicare and Medicaid for the period covered by the agreement that includes all of the years 2006 through 2011.

The United States further contends that KDMC maintained “improper financial relationships” with at least five employed cardiologists (named individually) in violation of the Stark Law which prohibits payment for referral of patients. It is claimed that these physicians received “compensation that was commercially unreasonable and in excess of fair market value.”

The agreement releases a variety of individual and corporate actors from further claims, but specifically and only for such under the False Claims Act, the Civil Monetary Penalties Law, the Program for Civil Remedies Act, and the Stark Law as well as two corresponding Kentucky statutes. The United States additionally promises not to seek exclusion from Medicare, Medicaid and other federal health programs, but left wide open its option to pursue current and future investigation and prosecution for criminal acts, or for violations of a variety of other civil laws.

KDMC agrees to cooperate fully with such future prosecutions or litigation and agrees not to attempt to include the costs of this settlement in its billings to federal government programs.

There is no mention of any of the settlement funds going to a whistleblower. (Would that have been included here?)

Both parties agree that, “This settlement agreement is neither an admission of liability by KDMC nor concession by the United States that its claims are not well-founded.” Either way, KDMC comes away damaged from this both financially and in reputation. While the settlement takes KDMC off the hook for this specific set federal prosecutions, it is clear that the hospital remains exposed to existing and potential criminal and civil actions.]

Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
29 May 2014