Better Solutions for Healthcare

AJC: Piedmont Healthcare pays $16 million to settle kickback complaint

By Ariel Hart

June 25,  2020

Piedmont Healthcare has agreed to pay $16 million to settle a whistleblower lawsuit that claimed the system overbilled Medicare and Medicaid for cardiac care and illegally paid kickbacks to practitioners who referred heart patients to its hospitals, the Justice Department announced Thursday.

To get higher payments from the federal health programs, Piedmont over a five-year period admitted thousands of patients to its hospitals for cardiac procedures that could have been performed on an outpatient basis, according to the original complaint filed in federal court in Atlanta.

Piedmont also was accused of acquiring medical practices at grossly inflated prices and paying doctors above-market salaries to induce them to steer patients to Piedmont facilities.

“Billing the government for unnecessary inpatient services wastes precious government resources and taxpayer dollars,” U.S. Attorney Byung J. “BJay” Pak said in a written statement.

Derrick L. Jackson, special agent-in-charge of the U.S. Department of Health and Human Services Office of the Inspector General, said such “greed-fueled” schemes “undermine the public’s trust in the health care industry.”

In agreeing to the settlement, Piedmont did not admit to wrongdoing. It issued a statement saying that the overbilling stemmed from nationwide confusion over whether patients in the hospital should be classified as observation status or inpatient status, and it did the best it could. Piedmont settled the case, it said, to end “a costly and time-consuming investigation.”

“Staying true to our purpose, Piedmont Healthcare’s doctors and nurses always make decisions based on the best interest and the health of the patient,” the statement said. “The care provided in these circumstances from over ten years ago was no different.”

The original lawsuit was filed by the anonymous whistleblower in 2016 under the federal False Claims Act and the Georgia False Medicaid Claim Act, which allow whistleblowers to sue on behalf of the government for allegations of fraud. The Department of Justice then intervened in the lawsuit, agreeing with the whistleblower on the claims of overbilling and kickbacks.

Under the laws, the whistleblower will receive $2,967,400 of the settlement.

The whistleblower’s attorney, Raymond Moss of the Moss and Gilmore law firm, did not comment on Piedmont, but said that actions such as the Department of Justice’s intervention in this case are “a loud wake-up call to hospitals and physicians throughout the country.”

With the settlement, the whistleblower abandoned additional claims that the government did not take up.

The whistleblower’s original claims alleged a broad scheme by Piedmont to build a heart care powerhouse by acquiring three cardiac care specialty practices, including Atlanta Cardiology Group, in 2007, and then using financial rewards to get some of the doctors to refer patients to Piedmont’s hospitals.

Piedmont doctors involved in the scheme threatened and intimidated other doctors and staff to get them to comply, the lawsuit alleged.

As part of the scheme, the lawsuit claimed, medically unnecessary procedures were performed on some patients, including implanting pacemakers and stents. The lawsuit alleged that Piedmont’s computerized records system allowed patients to be admitted for more care than needed. Sometimes, a canned description of a problem was inserted into the record, even though it was not written by the patient’s doctors. The doctor would be expected to approve the description afterward even if he or she didn’t believe it, according to the complaint….