Bryan Cohen Jan. 30, 2014, 3:24pm

FRANKFORT, Ky. (Legal Newsline) - Kentucky Attorney General Jack Conway announced a $16.5 million federal and state settlement on Tuesday with Saint Joseph London Hospital to resolve allegations of submitting false claims to Medicare and Medicaid.

Between Jan. 1, 2008 and Aug. 31, 2011, several doctors at Saint Joseph London Hospital allegedly performed multiple invasive cardiac procedures on Medicaid and Medicare patients who did not need them. The hospital then allegedly billed the federal programs for the unnecessary procedures, which included diagnostic catheterizations, coronary stents, coronary artery bypass graft surgeries and pacemakers.

The claims seeking reimbursement allegedly violated the False Claims Act because Medicaid and Medicare programs only reimburse healthcare providers for operations deemed medically necessary.

Kentucky will receive approximately $365,851 from the $16.5 million settlement, which represents Kentucky's share of the government's recovery of Medicaid funds. The Medicaid program is jointly funded by federal and state governments.

"I applaud the hard work of my Medicaid Fraud Unit and all of the agencies involved in this case," Conway said. "I am pleased that we have reached this settlement and are recovering thousands of dollars for a vital state program and for taxpayers."

The doctors who performed the procedures were affiliated with Cumberland Clinic, a physician group that entered an exclusive agreement in 2008 to provide cardiology services to Saint Joseph's patients. The settlement also resolves allegations that Saint Joseph violated the federal Stark Law and Anti-Kickback Statute by entering into sham management agreements with Cumberland Clinic doctors.

Under the terms of the settlement, Saint Joseph agreed to enter into a corporate integrity agreement with the U.S. Department of Health and Human Services' Office of Inspector General. Saint Joseph will put substantial internal compliance reforms in place to ensure its claims to federal healthcare programs follow all rules and regulations.

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