Wheeling Hospital accused of violating laws
WHEELING — The Department of Justice on Monday intervened in a whistleblower lawsuit against Wheeling Hospital Inc., R & V Associates Ltd. and hospital CEO Ronald Violi for allegedly violating the Stark Law and the Anti-Kickback statute.
The government, in its 49-page filing under the False Claims Act, alleges Wheeling Hospital, from 2007 to present, paid kickbacks to doctors and also made “incentive” payments to doctors based on how much patient business they referred back to the hospital.
“As a result, since at least 2007, defendants knowingly submitted and caused to be submitted thousands of false claims to the United States, which resulted in millions of dollars of reimbursement to Wheeling Hospital by the Medicare program for claims that were ineligible for payment because of defendants’ unlawful conduct,” the complaint states.
In response, hospital officials characterized the amended complaint filed by the Department of Justice as “an unwarranted attack” on Wheeling Hospital’s values and ethics.
“As we have said before, the allegations in this lawsuit are simply not true and an unfair attack on our hospital, our values and our dedicated physicians who partner with us to provide care to our community,” said Gregg Warren, Wheeling Hospital’s vice president of marketing and public relations. “We stand by our physicians and will aggressively defend against these baseless and unsubstantiated claims, while remaining fully committed to providing world-class care to the citizens of Wheeling and the Upper Ohio Valley every day.
“As a Catholic hospital, we expect every member of our staff, as well as our partners, to conduct themselves with honor and integrity. In this case, we believe we acted appropriately and lawfully to provide the best care possible, offering access to superior physicians in a range of specialties and fields of practice. We have not defrauded the U.S. government in any way, and we will vigorously present our case to the courts.”
The lawsuit notes R & V took over management of Wheeling Hospital in 2006 and quickly turned around the hospital’s financial performance. Prior to R & V, from 1998-2005, Wheeling Hospital lost about $55 million, according to the lawsuit. Wheeling Hospital, under R & V’s management, saw profits of nearly $90 million in the first five years of new management.
Former Wheeling-Charleston Diocese bishop Michael Bransfield hired R & V to manage Wheeling Hospital. According to the lawsuit, R & V, “in its management of the hospital, reported to and took direction from … Bransfield and an ad hoc committee of the hospital’s board of directors comprising … Bransfield, Monsignor Kevin Quirk of the Diocese of Wheeling-Charleston (president of the board of directors) and a third member of Wheeling Hospital’s Board of Directors.”
According to the lawsuit, “one of the primary means by which Violi and R & V engineered Wheeling Hospital’s financial turnaround was the hiring of a large number of physicians, primarily as employees, to capture for the hospital those physicians’ referrals and the resulting revenues, thereby increasing Wheeling Hospital’s market share. In executing that strategy, since at least 2007, Wheeling Hospital, under the direction and control of R & V and Violi, systematically entered into compensation arrangements with referring physicians that did not satisfy the requirements of any statutory or regulatory exception to the Stark Law, or that violated” the Anti-Kickback Statute.
The Stark Law prohibits a hospital from billing Medicare for services referred by physicians who have improper financial relationships with the hospital. In the filing, the Department of Justice alleges that Wheeling Hospital’s compensation to a number of employed and contracted physicians violated these statutory prohibitions because that compensation was based on the volume or value of the physicians’ referrals or exceeded the fair market value of the physicians’ services.
The Anti-Kickback Statute prohibits offering or paying anything of value to induce the referral of items or services covered by Medicare, Medicaid and other federal health care programs. The complaint also outlines alleged examples of this violation.
“Improper financial arrangements between hospitals and physicians can influence the type and amount of health care that is provided,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The department is committed to taking action to eliminate improper inducements that can corrupt the integrity of physician decision-making and drive up health care costs for all of us.”
“Medicare and Medicaid beneficiaries trust that their health care providers will make decisions based on sound medical judgment,” added U.S. Attorney Scott W. Brady. “Our office will take decisive action against any medical providers who betray that trust and make medical decisions based on their own financial interests.”
The lawsuit is part of an ongoing civil case in which the Department of Justice intervened. The 2017 civil lawsuit was unsealed in December, a year after its original filing by Louis Longo, a former executive vice president at Wheeling Hospital.
Wheeling Hospital has since sued Longo, alleging breach of fiduciary duty and abuse of process. The hospital alleged in its lawsuit that Longo had filed his claims hoping to obtain a quick and plentiful settlement. That lawsuit is pending in federal court in Wheeling.
Warren questioned the venue for Monday’s filing. “We are particularly disappointed that the U.S. government chose to file its claims against our hospital in Pennsylvania rather than in Wheeling,” he said. “Our community, our employees and loyal patients deserve to have the case litigated in West Virginia, where our hospital is located and our physicians provide care.”
This case was investigated by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation. It is being handled by Assistant U.S. Attorney Colin J. Callahan and Department of Justice attorney Rohith Srinivas.
(Comins can be contacted at firstname.lastname@example.org)