Medstar Agrees to Pay $35 Million to Settle Kickback Charges

Healthcare company MedStar Health will pay $35 million to settle claims that it made illegal kickbacks to a cardiology group in exchange for referrals for various cardiovascular procedures including implants of medically unnecessary stents.

The Department of Justice alleged that MedStar Union Memorial Hospital, MedStar Franklin Square Medical Center and MedStar Health — all based in Maryland — set up a kickback scheme with Mid Atlantic Cardiovascular Associates (MACVA), a Pikeville cardiology group, that operated for approximately five years under the guise of professional services agreements. The scheme violated the False Claims Act, the DOJ said.

The department claimed that MACVA sent Union Memorial hospital referrals for profitable cardiovascular procedures for Medicare-covered patients, including cardiac surgery and interventional cardiology procedures, from 2006 to 2011.

The agreement also covers allegations that MedStar received Medicare payments from 2006 to 2012 for medically unnecessary stents performed by a one-time employee of MACVA, John Wang, who later worked for MedStar. Additionally, it resolves a lawsuit brought by former patients of Wang alleging the doctor, MedStar and Union Memorial established a pattern of falsely submitting Medicare claims for medically unnecessary percutaneous transluminal coronary angioplasties with stent placement procedures. — James Miessler