In the same week that KentuckyOne Health announced statewide layoffs of its employees, the Federal Prosecutor’s office<\/a> of Eastern Kentucky announced the second largest settlement in history for its region. One can only speculate if the timing was a coincidence. Although the $16.5 million represents only a small portion of the $217 million target savings that KentuckyOne hopes to achieve, that self-insured institution is also facing hundreds of civil lawsuits. The hospital system and some of its doctors are paying a high price for someone\u2019s bad behavior.<\/p>\n No doubt we will soon hear a statement from the hospital or its parent KentuckyOne that the settlement represents no admission of wrongdoing. Indeed the news release from the Federal Attorney uses the word \u201calleged\u201d carefully, but in my opinion there can be no doubt that St. Joseph Hospital London, its doctors, or its managers should have known what was going on. The federal attorney minces no words. “We rely on healthcare providers to make treatment decisions based on clinical, not financial considerations. The conduct alleged in this case violates that fundamental trust and squanders scarce public resources set aside for legitimate healthcare needs.\u201d The hospital billed federal programs for unnecessary major cardiac procedures<\/a>, including angioplasty abuse<\/a> and even coronary artery bypass.<\/p>\n The settlement also resolves allegations that St. Joseph’s entered into \u201csham management agreements\u201d with the doctors who performed the unnecessary medical procedures. The hospital agreed to place itself under outside review of its billing for the next five years.<\/p>\n Several physicians who brought this \u201cegregious fraud\u201d to the government’s attention will receive a $2.5 million “finders fee.\u201d The Commonwealth of Kentucky will recover $366,000 of Medicaid funds. Nothing is said about private insurers like Humana or Anthem, but they may go after St. Joseph London for recovery as well.<\/p>\n