Cape Cod Hospital, located in Hyannis, Massachusetts, has agreed to a $24.3 million settlement to resolve allegations under the False Claims Act. The hospital was accused of knowingly submitting claims to Medicare for transcatheter aortic valve replacement (TAVR) procedures that did not comply with Medicare's specific rules for patient evaluation.
The hospital began offering TAVR procedures in 2015 for patients suffering from aortic stenosis, a serious heart condition. However, it is alleged that from November 1, 2015, through December 31, 2022, Cape Cod Hospital submitted hundreds of non-compliant claims to Medicare for these procedures. In some cases, an insufficient number of physicians evaluated a patient’s suitability for the procedure; in others, the physicians failed to document and share their clinical judgment with the medical team performing the TAVR procedure.
"Hospitals that participate in the Medicare program must abide by applicable coverage and reimbursement rules," said Principal Deputy Assistant Attorney General Brian M. Boynton. "The department will hold healthcare providers accountable when they knowingly fail to comply with Medicare reimbursement requirements."
Acting U.S. Attorney Joshua S. Levy added that Cape Cod Hospital ignored Medicare's rules and received millions of dollars from Medicare unjustly over several years despite internal warnings.
As part of the settlement agreement, Cape Cod Hospital has entered into a five-year corporate integrity agreement with the Department of Health and Human Services' Office of Inspector General (HHS-OIG). This agreement includes an annual review of its paid Medicare claims by an Independent Review Organization.
Special Agent in Charge Roberto Coviello of HHS-OIG emphasized that healthcare providers are expected to follow Medicare rules and bill properly.
In response to these allegations, Cape Cod Hospital took steps towards disclosure, cooperation and remediation under the department’s guidelines for False Claims Act cases. It voluntarily produced materials, identified relevant medical records and admitted failure to adhere to the applicable Medicare requirements.
The claims resolved by this settlement include those brought under the qui tam or whistleblower provisions of the False Claims Act by Richard Zelman, a former Cape Cod Hospital physician. As part of the resolution, Dr. Zelman will receive approximately $4.36 million.
This resolution was achieved through a coordinated effort between several departments, including the Justice Department’s Civil Division and the U.S. Attorney’s Office for the District of Massachusetts, with assistance from HHS-OIG and the FBI.
The case was handled by Trial Attorney Kimya Saied of the Fraud Section and Assistant U.S. Attorney Andrew A. Caffrey, III for the District of Massachusetts.