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Federal suit claims Hamot, heart doctors defrauded Medicare

A cardiologist once affiliated with Hamot Medical Center is claiming the hospital and a group of Erie doctors defrauded Medicare by performing unnecessary and costly surgeries involving heart stents.

The claims, made in a whistle-blower suit filed in U.S. District Court in Erie, come as the national medical community is scrutinizing angioplasty procedures, which commonly include the insertion of stents -- tiny mesh metal tubes meant to keep an artery open and improve blood flow.

A study published in the Journal of the American Medical Association in July found 12 percent of angioplasty procedures nationwide were "inappropriate."

The doctor who is suing in the Erie case, Tullio Emanuele, M.D., is claiming the doctor group and Hamot performed unnecessary angioplasty procedures and other surgeries and overbilled Medicare for them from 2001 to 2005.

One patient, the suit claims, died after undergoing a heart catheterization he did not need. Another patient, the suit claims, died from complications from unnecessary bypass surgery.

Emanuele, now of Kentucky, is suing five heart physicians, two medical practices -- Medicor Associates Inc. and its affiliate, Flagship Cardiac, Vascular and Thoracic Surgery of Erie -- and what is now known as UPMC Hamot. The hospital became an affiliate of the University of Pittsburgh Medical Center in 2011.

Emanuele is claiming Medicor Associates Inc., his practice when he worked in Erie, engaged in kickbacks with Hamot to refer heart patients to the hospital. Medicor is UPMC Hamot's full-service cardiology group.

According to the suit, Hamot signed annual contracts with Medicor and Flagship CVTS that required the doctors to provide medical services at Hamot. The contracts, the suit claims, were really "sham arrangements intended to disguise the actual purpose of Hamot to pay kickbacks to Medicor and Flagship CVTS in exchange for patient referrals." The contracts were $75,000 per physician and totaled as much as $525,000 a year, according to the suit.

The suit claims the doctors and Medicor engaged in the scheme "to establish and promote the rapid development of a competitive cardiovascular surgery program at Hamot, and increase revenues for Hamot and themselves."

The suit claims Hamot and the doctors could have relied on less invasive techniques, such as the use of medicine. An average angioplasty costs about $20,000. "These are really lucrative procedures in which hospitals and doctors make a lot of money," said one of Emanuele's lawyers, Andrew Stone, of Pittsburgh. Hospital declines comment.

Emanuele is claiming the hospital and the doctors violated the federal anti-kickback law and the federal Stark Act. The act prohibits a hospital from submitting a claim to Medicare for services that were prescribed by a physician who has an improper financial relationship with the hospital.

"As the result of the fraudulent practices," Emanuele claims in the suit, "Medicare overpaid for cardiac and vascular surgical and diagnostic services for its beneficiaries. Those patients were placed at significant and unnecessary risk of harm, and substantial public dollars were wasted."

If it loses the case, UPMC Hamot and the Medicor doctors would have to repay any fraudulent Medicare reimbursements at three times the original cost. The defendants would also face fines. Emanuel and his lawyers would be entitled to as much as 30 percent of the recovered amount.

A spokeswoman for UPMC Hamot said the hospital does not comment on pending litigation.

UPMC Hamot also said Medicor, Flagship CVTS and the doctors would have no comment. The doctors named as defendants are Richard W. Petrella, M.D.; Robert J. Ferraro, M.D.; Charles M. Furr, M.D.; Timothy C. Trageser, M.D.; and Donald Zone, M.D.

UPMC Hamot and the other defendants were served copies of the suit last week. They have 20 days to respond in court.

A national issue

Emanuele and his lawyers are pursuing the case under the federal False Claims Act, which allows private citizens to sue on behalf of the government over allegations of fraud and other misuses of federal money. Such suits are known as a qui tam actions.

Stone, the Pittsburgh lawyer, is representing Emanuele in the Erie case with another lawyer, Jamie Bennett, of Maryland. Stone specializes in False Claims Act cases. Bennett worked as an assistant U.S. attorney in Maryland, where she handled False Claim Act cases involving Medicare and Medicaid fraud.

In November 2010, as an assistant U.S. attorney, she negotiated a $22 million settlement with a Baltimore-area hospital, St. Joseph Medical Center, over claims the hospital paid kickbacks to a cardiology group under the guise of professional services agreements. In return, the government said, the cardiology group referred heart surgeries to the hospital, including angioplasty procedures. The case against St. Joseph Medical Center originated with doctors filing a qui tam action. The St. Joseph case increased interest in stent use nationwide; a cardiologist involved in that case was the subject of a U.S. Senate Finance Committee report in 2010. Then the study of angioplasty procedures was published in the Journal of the American Medical Association in July.

About 600,000 angioplasty procedures are performed in the United States each year, the study's researchers said. The study, the first of its kind, examined the cases of patients who underwent angioplasty procedures at 1,091 hospitals in the United States between July 1, 2009, and Sept. 30, 2010.

About 12 percent of those procedures were unnecessary, the study found. The researchers said as many as 15,000 patients in the United States could be receiving unnecessary angioplasty treatments a year. "At an average cost of $20,000 for each angioplasty procedure, this translates to $300 million annually -- and this does not take into account the long-term costs of medication treatment and complications from treatment, such as bleeding," one of the study's authors, Paul Chan, M.D., of Kansas City, Mo., said in a statement in July. "In this health-care climate of limited resources, the finding of inappropriate angioplasty in some hospitals suggests overuse of the procedure and an opportunity to improve decision making as to which patients should be selected for an invasive and costly procedure."

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