Senators launch fraud inquiry of Md. hospital

St. Joseph records sought

probe spurred by report of unneeded stents

February 20, 2010|By Robert Little

Federal lawmakers have asked St. Joseph Medical Center to turn over three years of billing records and other documents related to cardiac care, saying they are troubled by reports of unnecessary coronary stents implanted at the Towson hospital and want to investigate for signs of Medicare fraud.

Montana Sen. Max Baucus and Iowa Sen. Charles E. Grassley - the top Democrat and senior Republican, respectively, on the Senate Finance Committee - also asked the hospital for records of its financial relationship with manufacturers of the medical devices. They set a March 12 deadline, saying their committee was launching an inquiry as part of its role "to protect taxpayer dollars from waste, fraud and abuse."

"In addition to putting patients' lives at risk, unnecessary medical procedures amount to wasteful spending of precious federal health care dollars," the senators wrote in a letter to the hospital, which was sent to CEO Jeffrey K. Norman this week and shared with The Baltimore Sun.

St. Joseph officials pledged to cooperate, calling the committee's interest understandable, given the hospital's disclosure that hundreds of patients received expensive and potentially dangerous procedures that they might not have needed.

"Transparency and cooperation are in the best interest of the hospital's patients, physicians, employees and community," they said in a statement released Friday.

The Senate probe is the latest development in an unfolding saga at St. Joseph that has already seen the departure of its top executives, denial of medical privileges to a marquee physician, a drop in the hospital's lucrative cardiac-care practice and a federal fine expected to exceed $5 million.

For more than eight years, the hospital's dominant cardiology practice, MidAtlantic Cardiovascular Associates, has fought lawsuits and allegations of inappropriate collusion in the process of referring cardiac patients to St. Joseph and other suburban hospitals. In 2008, St. Joseph hired Dr. Mark Midei, a prominent interventional cardiologist, away from Mid- Atlantic, scuttling a deal the practice had struck to merge with MedStar Health, a competitor of St. Joseph's.

Months later, the U.S. Department of Health and Human Services began a fraud investigation that centered on St. Joseph's relationship with MidAtlantic, and three top hospital executives were placed on leave and later resigned. St. Joseph reached a settlement with the federal government in July. Its details, including the amount of financial penalties, are expected to be disclosed soon; court records suggest that the fine will exceed $5 million.

Last summer, the hospital began reviewing records of cardiology patients, and in December it began sending letters to Midei's patients, saying their coronary stent implants might not have been needed.

Stents - mesh tubes inserted to open clogged arteries - typically are implanted into vessels with at least a 70 percent blockage. But the hospital found that at least 369 patients who received the $10,000 implants had only minor blockages.

Midei, who has denied the allegation and said he expects to be exonerated of any wrongdoing, was stripped of his privileges at the hospital last summer.

The reports have resulted in lawsuits, including a class action filed last month in Baltimore on behalf of "hundreds, if not thousands" of St. Joseph's heart patients. The lawsuit seeks compensation for the continuing health risks of stent implants and for the psychological damage caused by an allegedly fraudulent diagnosis of heart disease.

In an interview last month, Norman said the review of Midei's records was spurred by a patient complaint and at the suggestion of federal investigators but that the hospital's settlement with the government was not related to the coronary stent cases.

Still, the senators' letter makes clear that federal officials are looking for signs of fraud.

Baucus and Grassley asked St. Joseph for all documents and communications related to the allegedly unnecessary stents, including bills to Medicare and private insurance companies for the procedures. They asked for a full description of the hospital's relationship with Midei and documents on the brands of stents implanted and the hospital's financial arrangements with the manufacturers. And they warned the hospital not to destroy or alter any records.

Baucus, the chairman of the Senate Finance Committee, called the troubles at St. Joseph a call to action for federal lawmakers.

"This case is just one more example of why we must continue working to pass health care reform that will aggressively fight fraud and waste in our health care system and help prevent similar abuses in the future," he said in an e-mail to The Baltimore Sun. "We will continue using our oversight authority to determine what went wrong at St. Joseph Medical Center and whether further action is needed to protect patient safety and taxpayer dollars."

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