According to the U.S. Department of Justice (DOJ), MedStar Health Inc. out of Columbia, Md., and MedStar Union Memorial Hospital with MedStar Franklin Square Medical Center located in Baltimore, Maryland, have all resolved allegations of fraud in healthcare pending against them.

The allegations were filed against the entities under the Federal False Claims Act and were cleared by a agreed upon fraud settlement of $35 million reached on March 21, 2019.

The allegations centered around purported kickback payments made to a local cardiovascular care group located in Pikesville, Md. The care group is known as MidAtlantic Cardiovascular Associates (MACVA).

The U.S. government says that the MedStar organizations paid MACVA monies in exchange for referring patients for high-cost cardiovascular interventions. The exchange of funds was allegedly hidden by professional services contracts at the two Baltimore hospitals.

As indicated by an article posted on the Baltimore Sun website on March 25, MACVA—which no longer exists—was one of the largest cardiovascular practices in the area for the time period in question.

They purportedly received kickbacks from the two MedStar Baltimore hospitals from 2006 through 2011. The monies they received were allegedly to pay off the practice for sending them patients for high-cost heart procedures.

This type of reward for referrals, according to the Sun, incentivizes physicians to determine procedural need where there is none for the sake of their own enrichment. This endeavor can have dangerous and life-threatening consequences for the patients in the middle of the pocket-lining healthcare fraud game.

Also at the heart of paying medical kickbacks is the wasting of taxpayer monies designed to support public health programs like Medicare and Medicaid. By referring patients for procedures that are unneeded, a great deal of public funds are flushed unnecessarily.

What is Qui Tam?

A qui tam lawsuit, also known as a whistleblower lawsuit, filed under the False Claims Act allows American citizens to file legal claims on behalf of the U.S. government when they have an insiders view of kickback schemes and false claims being made against public health programs. The government gets an opportunity to investigate and intervene in the lawsuit as a plaintiff. The initiator is known as a relator and is often rewarded a portion of any recovered monies.

Historically, cases under the False Claims Act have involved fraud among military contractors. Today, many of these cases are based on allegations of fraud in healthcare.

In this instance, according to the Baltimore Business Journal on March 21, the cardiac fraud in healthcare suit was started by three cardiac surgeons that were part of another cardiology practice group in Baltimore. Initiated as far back as June of 2010, this $35 million settlement will finally resolve these allegations.

The settlement will also resolve allegations that the MedStar Health entities were on the receiving end of Medicare payments from the U.S. government for the placement of heart stents over a six-year period. From 2006 to 2012, Dr. John W. purportedly implanted several of these devices into patients when they were never needed. This doctor worked for MACVA at one point and then became an employee of the MedStar Health System.