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Whistleblower Gets Partial Win In Hospital Kickback Suit

Updated: Jul 10, 2022

A Pennsylvania federal judge ruled in favor of a whistleblower Wednesday, finding that two agreements between a set of doctors and a University of Pittsburgh Medical Center-owned hospital ran afoul of a federal law governing Medicare reimbursements for referrals, but she said the evidence was less clear with regard to the core relationship between the parties.

Law360, Philadelphia (March 15, 2017, 2:34 PM EDT) -- U.S. District Judge Joy Flowers Conti found that cardiologist Tullio Emanuele had demonstrated that the arrangements between the doctors at Medicor Associates Inc. and UPMC Hamot in Erie over a Women’s Heart Health Program and a chair for the hospital’s Department of Cardiovascular Medicine and Surgery breached the Stark Act. The law prohibits a health care entity from submitting claims to Medicare based upon referrals from doctors with which it has a “financial relationship.” While the judge concluded that the original six agreements establishing a relationship between the parties could potentially fall under exceptions to the law, the others were not backed by sufficient documentation. “The Women’s Heart Health directorship and CV Chair position do not satisfy any of the exceptions cited by defendants,” Judge Conti said. “Those arrangements were never set

forth in a signed writing or collection of writings and do not meet the requirements of the isolated transactions exception.” Emanuele worked as a cardiologist at Medicor from 2001 through 2005, and in 2010 he filed a complaint under seal alleging that the relationship between the group and the hospital violated the False Claims Act. In 2011, the government declined to intervene in the case, but Emanuele went forward on his own. In 2014, he filed the motion for summary judgment, arguing there was undisputed evidence that the kickback scheme he described violated the Stark Act. Judge Conti’s opinion focused on the exceptions to the law. “Once the plaintiff or the government has established a violation of the Stark Act, the defendant bears the burden of establishing that the conduct was protected by an exception,” she said, citing a 2009 decision from the Third Circuit. The judge first looked at the initial six “directorship” agreements between the doctors and the hospital. Emanuele had argued that because they were permitted to lapse several times during a 21-month span, they violated a requirement that any such agreements must be “in writing.” The judge, however, pointed to a set of addenda as well as the original agreements to find that a jury could reasonably conclude they were addressed in writing.

However, she said this was not the case with the agreements for the department chair and the Women’s Heart Health initiative. “In short, none of the documents referenced by the defendants 'would permit a reasonable person to verify that the [Women’s Heart Health] arrangement complied with an applicable exception' at the time that referrals under that compensation arrangement were made,” she said. The case will now advance to trial. “This is a very good decision for us. Now we’re ready to move forward,” said attorney Andrew Stone, who represents Emanuele. Emanuele is represented by Andrew M. Stone of the Stone Law Firm LLC, G. Mark Simpson of Simpson Law Firm LLC and Jamie M. Bennett of Ashcraft & Gerel LLP. Medicor is represented by Neal R. Devlin of Knox McLaughlin Gornall & Sennett PC. Hamot is represented by David B. White and Laura Benson of Burns White LLC and Stephen Stallings of the Law Offices of Stephen Stallings. The case is Tullio Emanuele v. Medicor Associates Inc. et al., case number 1:10-cv-00245, in the U.S. District Court for the Western District of Pennsylvania. --Editing by Orlando Lorenzo.

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