Franklin Square Implicated In Kickback Scheme

BALTIMORE, MD — MedStar will pay $35 million to settle allegations that it gave kickbacks to a Pikesville cardiology office for referrals. The lawsuit against MedStar alleges that Union Memorial and Franklin Square violated the Anti-Kickback Act and False Claims Act by offering professional services contracts to the cardiology office for its referral of Medicare-insured patients for cardiac procedures that were not medically necessary.

Medstar Franklin Square Medical Center, MedStar Union Memorial Hospital and MedStar Health in Columbia will pay the multi-million-dollar settlement over claims that they paid kickbacks to the Mid-Atlantic Cardiovascular Associates in Pikesville for referring patients for procedures such as cardiac surgery from Jan. 1, 2006, to July 31, 2011, according to prosecutors.

“Kickbacks give doctors an incentive to pursue unnecessary treatments that are costly and sometimes even dangerous to patients,” U.S. Attorney Robert K. Hur said in a statement about the case. “We will not tolerate medical care providers who put their patients at risk and waste taxpayers’ dollars in order to line their own pockets.”

MedStar will also settle allegations brought by three cardiac surgeons at a Baltimore practice. These whistleblowers said MedStar received payments to perform medically unnecessary stents from January 2006 to Dec. 28, 2012, according to prosecutors.

"We will continue to protect patients and taxpayer-funded government health programs from these unnecessary services, as the government contended in this case," Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, said in a statement. “Patients rightly expect their doctors will make recommendations based on sound medical practice — not payoffs that too often result in needless and sometimes even harmful procedures."

The settlement also resolves a suit that former patients of John Wang, M.D., that claimed Union Memorial, Wang and MedStar regularly performed medically unnecessary coronary angioplasty procedures with stents.The hospital and doctor were accused of submitting false claims to Medicare for those cardiac stent procedures in a suit filed in December 2012.

“Kickbacks made in connection with the provision of medical services undermine the integrity of our health care system,” Assistant Attorney General for the Civil Division of the Department of Justice Jody Hunt said in a statement. “We will take action against medical service providers who through unlawful conduct put their own financial interests ahead of the best interests of patients."