Erie-based UPMC Hamot and cardiology practice Medicor Associates Inc. have agreed to pay the U.S. government $20.7 million to settle a whistleblower lawsuit that alleged that the hospital paid the independent medical practice for patient referrals in violation of federal law.
Pittsburgh, PA - Erie-based UPMC Hamot and cardiology practice Medicor Associates Inc. have agreed to pay the U.S. government $20.7 million to settle a whistleblower lawsuit that alleged that the hospital paid the independent medical practice for patient referrals in violation of federal law.
The settlement was reached Tuesday as the case, which was filed in U.S. District Court of the Western District of Pennsylvania, was preparing for trial Wednesday in Erie. Cardiologist Tullio Emanuele filed the lawsuit against the hospital in 2010, a year before the health system was acquired by Pittsburgh-based UPMC.
UPMC spokeswoman Susan Manko said she could not comment on the case. The settlement money would help offset Medicare’s loss, which was estimated at more than $50 million.
Whistleblower lawsuits describe so-called qui tam lawsuits, which are “filed on behalf of governmental agencies such as Medicare to expose wrongdoing by companies and people who do business with the government. In exchange, those who file are entitled to a share of any settlement.
Worried about increasing competition for patients from rival St. Vincent Hospital, the former Hamot Medical Center between 2004 and 2010 is alleged to have created sham directorships for doctors at Medicor Associates between 2004 and 2010, according to court records.
Medicor was a physician-owned practice and the doctors were allegedly paid millions of dollars as incentives to refer patients to Hamot for a range of heart procedures. The arrangement resulted in unnecessary medical expenses, according to a plaintiff’s lawyer.
“This is an example of the sweetheart deals between hospitals and physicians that undermine patient confidence and drive up health care costs for everybody,” said Andrew Stone, principal of the Downtown-based Stone Law Firm LLC, which represented Dr. Emanuele with Simpson Law Firm LLC of Fayetteville, Ga., and Morgan Verkamp LLC of Cincinnati, Ohio.
North Side lawyer Stephen Stallings, Strip District-based Burns White LLC and Gornall & Sennett of Erie represented the defendants.
Kris B. Mamula: firstname.lastname@example.org or 412-263-1699