Maryland health system pays $35 million to settle allegations of Anti-Kickback Act and False Claims Act violations

MedStar Health, a Maryland-based health system, agreed to pay $35 million to settle allegations that it paid kickbacks to a cardiology group for referrals and that it received inappropriate Medicare payments for medically unnecessary cardiac stents.

According to the Department of Justice, from 2006-2011, MedStar paid kickbacks to MidAtlantic Cardiovascular Associates (MACVA) in the form of professional services agreements. In return, MACVA referred patients to a MedStar hospital for expensive cardiovascular procedures, including cardiac surgery and interventional cardiology procedures. In 2010, a group of cardiac surgeons practicing as members of the Cardiac Surgery Associates in Baltimore filed a lawsuit alleging MedStar was violating the Anti-Kickback Act and the False Claims Act.

The settlement also resolves a separate lawsuit brought by former patients of John Wang, MD, a former employee of MACVA who was later employed by MedStar. That lawsuit alleged that Wang and MedStar performed medically unnecessary percutaneous transluminal coronary angioplasty with stent placement procedures and submitted false claims to Medicare for those procedures.

The settlement does include an admission of liability and MedStar has denied all wrongdoing.