Court report: Louisiana hospital to pay $3.3M to settle Medicare fraud charges
A Medical Device Daily
New Orleans area hospital West Jefferson Medical Center (Marrero, Louisiana) will pay the U.S. and the State of Louisiana $3.3 million to resolve allegations that the hospital overcharged the Medicaid program, the Department of Justice (DoJ) said. The settlement resolves allegations in a qui tam suit brought under federal and state False Claims Acts.
The lawsuit alleged that the hospital led the Medicaid program to believe that the medical center's Pediatric Intensive Care Unit (PICU) could perform certain critical care services, but the unit did not possess such capabilities. Thus, Medicaid overpaid the hospital between March 1998 and October 2003.
Leslie Klemm, a nurse at the hospital, filed the suit on behalf of the government and will receive $627,000 as her share of the recovery.
The investigation was a cooperative effort between the Department of Health and Human Services Office of Inspector General, the Louisiana Attorney General's Medicaid Fraud Control Unit, the Office of the U.S. Attorney in New Orleans and the DoJ's Civil Division.
"As the Greater New Orleans area continues to recover from the devastation of Hurricane Katrina, it is important that those entrusted with providing our community with critical health care have the capability to meet those needs," said Jim Letten, U.S. attorney for the Eastern District of Louisiana. He said that resolution of the case "should send a strong message to the healthcare community that precious healthcare dollars are not to be obtained improperly."
In other legalities: Bronstein, Gewirtz & Grossman reported filing a class action in the U.S. District Court for the District of Colorado vs. Spectranetics (Colorado Springs) and various individuals on behalf of Spectranetics shareholders who bought common stock between April 19, 2007, and Sept. 4, 2008.
The suit alleges that the company concealed from the public that it lacked effective regulatory controls; illegally marketed its laser and catheters for uses not FDA-approved; failed to report to FDA that tests found its laser caused significant damage to stents being used in the trial; illegally tested several products on patients without FDA approval; lacked effective internal controls; and its financial results were materially inflated.
Spectranetics last month said it had been slapped with several class action suits alleging that it and some members of management made false and misleading statements and omissions. The company said the claims appear to relate to the matters being investigated by the FDA and the U.S. Immigration and Customs Enforcement (ICE), also reported last month (Medical Device Daily, Sept. 29, 2008).
The Colorado Springs Police Department and ICE agents raided Spectranetics in September, requesting information relating to products used in the treatment of in-stent restenosis, such as catheter guidewires and balloon catheters made by third parties outside the U.S. The company said that federal authorities are also seeking information on two post-market studies completed between 2002 to 2005 and payments made to personnel in connection with these studies, as well as concerning compensation packages for certain employees (MDD, Sept. 8, 2008).
Spectranetics makes an excimer laser approved in the U.S., Europe and Japan for use in minimally invasive cardiovascular procedures.