Missouri Hospitals Settle Medicaid-Billing Suit for $34M

SPRINGFIELD, Mo. (CN) – Settling claims that its chemotherapy services were linked to an illegal referral scheme, two hospitals in southwest Missouri agreed Thursday to pay the U.S. government $34 million.

“We are very pleased with the terms of the settlement,” said Jenifer Placzek, an attorney for Viran Roger Holden, the oncologist who blew the whistle in 2015 on Mercy Hospital Springfield. “These laws are in place to help protect patients from receiving unnecessary treatment. When these laws are broken, patients’ lives are put at risk. It does the entire community a service when a physician like Dr. Holden has the courage to come forward and do what is right.”

Under the qui tam provisions of the False Claims Act, Placzek’s hematologist client will take home $5.44 million of the government’s recovery.

When Holden sued Mercy in May 2015, the Springfield, Missouri-based physician had been working at the hospital formerly known as St. John’s Regional Health System for about 10 years.

Holden had been fired days earlier, finally canned after first speaking out in 2012 about what he felt were medically unnecessary services being rendered by other Mercy doctors.

After his initial complaints cost him his position as chair of medical oncology in July 2012, Holden says he met with state investigators, the U.S. Office of the Inspector General and, six weeks before he was was put on leave, attorneys who deposed him for a fellow radiation oncologist’s wrongful-termination suit against Mercy.

The United States intervened in Holden’s suit a month later, accusing Mercy and its clinic affiliate of defrauding Medicare.

A press release about the parties’ recent settlement claims that the oncologists who referred patients to Mercy for chemotherapy services were on a formula-based compensation scheme that improperly considered what value their patient referrals brought to the Mercy Oncology Infusion Center – Chub O’Reilly Cancer Center.

The government says Mercy’s practices ran afoul of a federal law restricting the financial relationships between hospitals and the doctors who refer patients to them.

Mercy did not admit to any wrongdoing as part of the settlement and emphasized in a statement that it did not intentionally violate any laws.

“We take this situation very seriously,” Jon Swope, regional president of Mercy Central Communities, said in a statement. “Our efforts today are focused on continuing to maintain a more rigorous audit and compliance program.”

Mercy health system includes several hospitals in Missouri, Kansas and Oklahoma, with outreach ministries in Louisiana, Mississippi and Texas.

Attorney Placzek noted that his client, Dr. Holden, will soon be caring for patients through Oncology Hematology Associates in Springfield, in addition to his continued involvement with Breast Cancer Foundation of the Ozarks.

“Patients should always come before profits,” Placzek said. “I hope this helps raise awareness of the provisions of the False Claims Act that allow people like Dr. Holden to help stop violations of the act and share in the government’s recovery.”

Acting Assistant Attorney General Chad Readler explained the danger of medical-referral compensation in a statement.

“When physicians are rewarded financially for referring patients to hospitals or other health care providers, it can affect their medical judgment, resulting in overutilization of services that drives up health care costs for everyone,” Readler said.

“Patients deserve assurances that they are receiving appropriate medical care … and taxpayers deserve assurances that the cost of public health care programs is not inflated by unnecessary procedures and services,” he added.

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