The Department of Justice (DOJ) ordered Cape Cod Hospital to pay nearly $24.4 million to settle alleged False Claims Act violations that it knowingly submitted claims to the government for procedures that failed to comply with Medicare rules.
Cape Cod Hospital will pay more than $14 million in restitution to the government, according to its settlement agreement. The hospital entered into a five-year corporate integrity agreement (CIA) with the Department of Health and Human Services’ Office of Inspector General requiring annual review of its paid Medicare claims by an independent review organization, the DOJ announced in a press release Thursday.
The settlement resolves claims brought under the qui tam provisions of the False Claims Act by Richard Zelman, a former physician at the hospital who alleged he was retaliated against and fired for blowing the whistle, the Cape Cod Times reported. He will receive about $4.3 million and approximately $121,000 to cover expenses, attorney’s fees, and costs related to the civil action.
The settlement amount is the largest False Claims Act recovery from a Massachusetts hospital, according to a blog post by Zelman’s legal counsel, Gregg Shapiro.
The details: In 2015, Zelman established the hospital’s transcatheter aortic valve replacement (TAVR) program, which serviced patients with narrowing aortic valves by replacing their damaged valve with an artificial one, the DOJ said.
Medicare rules at the time required the hospital to conduct an independent examination of prospective patients to evaluate their suitability for TAVR, document the rationale for their clinical judgment, and make the rationale available to the medical team performing the procedure.
From November 2015 to December 2022, the hospital knowingly submitted hundreds of claims to Medicare for the procedures that did not comply with these requirements, the DOJ claimed.
“Hospitals that participate in the Medicare program must abide by applicable coverage and reimbursement rules,” said Brian Boynton, head of the DOJ’s Civil Division, in the release. “The department will hold healthcare providers accountable when they knowingly fail to comply with Medicare reimbursement requirements.”
Compliance considerations: The DOJ acknowledged the hospital voluntarily produced materials, identified relevant medical records, admitted it failed to adhere to applicable Medicare requirements, and implemented appropriate remedial measures.
Within 90 days, the hospital must hire a compliance officer, appoint a compliance committee chaired by the compliance officer, provide written standards for the compliance officer and committee to abide by, institute covered persons and board training, and engage an independent review organization, according to its CIA.
Company response: In an emailed statement, the hospital said the CIA “incorporates and augments the hospital’s long-standing corporate compliance program and has implemented proactive measures to better ensure robust documentation of pre-procedure evaluations conducted for patients who are potential TAVR candidates.”
The hospital added it has “augmented its documentation practices and believes its heart team clinicians … provide outstanding medical care in compliance with all applicable Medicare requirements” and will “continue to monitor these services going forward.”
Editor’s note: This story was updated May 20 to include more details from Cape Cod Hospital’s corporate integrity agreement published by the Department of Health and Human Services’ Office of Inspector General.
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