There are few places where people are as vulnerable as they are in the operating room. Totally unconscious, we trust that our doctors, nurses, and anesthesiologists will care for us. At the very least, we assume they’ll actually be in the operating room during surgery.
Yet, according to a new lawsuit filed by whistleblower Dr. John Mamalakis, that’s not what was happening at Ascension All Saints Hospital in Racine, Wisconsin. He says that the hospital’s contracted anesthesiology group, TeamHealth, relied on unethical practices that put patients’ lives in danger and defrauded federal insurance programs. TeamHealth anesthesiologists routinely billed Medicare, Medicaid, and TRICARE for the highest level of care, even when that care wasn’t provided—and in some cases, when anesthesiologists weren’t even present during surgeries.
Knoxville-based TeamHealth is one of the largest healthcare staffing companies in the U.S., and it has a presence in hundreds of hospitals throughout the country. Dr. Mamalakis first became aware of fraud at All Saints in 2011, when the hospital began contracting with the company (he had previously worked under Southeastern Anesthesia Consultants and Anesthetix). His lawsuit alleges that the fraud continued at All Saints until at least 2014, and it may still be happening there and in hospitals in 17 other states.
Per the lawsuit, the crux of TeamHealth’s plan revolved around having anesthesiologists bill for medical direction, which fetches the highest reimbursement rate from Medicare and other insurance providers. Under federal law, in order to bill for medical direction, doctors must provide seven specific services during surgery. Anything less, and it must be billed as medical supervision, which is reimbursed at a lower rate.
The problem? Allegedly, anesthesiologists at All Saints rarely met the requirements for medical direction. According to the lawsuit, they “did not perform at least one of the required steps nearly 100 percent of the time.”
In his claim, Dr. Mamalakis provided numerous examples of surgeons falsely billing for medical direction, many of which are alarming:
- Dr. D never stepped foot in the operating room during a cataract extraction, even after complications occurred. He also never created an anesthetic plan, which is one of the seven required medical direction steps.
- In 2010, Dr. Mamalakis received a call from Dr. P, asking him to treat one of her patients for low blood pressure during a hip replacement. Dr. P had left the hospital for Illinois immediately after the patient had gone into surgery.
- That same doctor said she was providing medical direction for two patients when, in reality, she wasn’t even on hospital grounds. When TeamHealth director Sonya Pease showed up at All Saints, Dr. Mamalakis had to call Dr. P and tell her to come back to work.
- Another doctor said he was treating patients in three different operating rooms, but he had actually left the hospital in the early afternoon to wait for a piano to be delivered to his house.
- During a high-risk procedure on an elderly Medicare patient, Dr. G left the hospital “to prepare her horses for a show that weekend.”
Dr. Mamalakis refused to participate in the fraud, and he reported his concerns to TeamHealth higher ups multiple times. But instead of addressing the problems, TeamHealth simply fired Dr. Mamalakis without cause.
Although the firing was difficult for him, Dr. Mamalakis eventually found work at Milwaukee’s St. Joseph Hospital, where he now serves as chairman of the Professional Review Committee. And Dr. Mamalakis’ bravery encouraged other doctors to come forward. He started getting calls from TeamHealth doctors across the country saying they witnessed the same things. That led Dr. Mamalakis to file a False Claims Act lawsuit in 2014.
The Department of Justice investigated the case but declined to take it on. It did, however, give Dr. Mamalakis the green light to proceed on his own. Years later, the case has still not made it to depositions because TeamHealth has tried repeatedly to get the case thrown out. But Dr. Mamalakis remains hopeful.
In an earlier lawsuit resolved just last year, TeamHealth paid $60 million to settle claims that IPC, a physician group practice that TeamHealth acquired in 2015, systematically overbilled Medicaid and Medicare. The whistleblower in that case, Dr. Bijan Oughatiyan, alleged that physicians working under IPC “billed for more services in one day than could possibly have been provided in a 24-hour period.” As part of the settlement, TeamHealth entered into a five-year Corporate Integrity Agreement, too.
The company is also facing a lawsuit recently filed by Hospital Internists of Texas, which claims that TeamHealth “pressured physicians to make medical decisions designed to make money” for St. David’s HealthCare, a company that operates hospitals in Austin, Round Rock, and Georgetown. St. David’s is named as a coconspirator in the lawsuit.
Dr. Mamalakis says he doesn’t regret coming forward, but he does wish he documented the fraud he witnessed, which would have given him a stronger case. If you’ve seen Medicaid fraud at your job, start keeping records now and get assistance filing a report. Under the False Claims Act, you may be entitled to a reward.
Under the U.S. and state False Claims Acts, whistleblowers that report healthcare fraud involving Medicaid or Medicare could be entitled to a percentage of any verdict or settlement. Report fraud today, and you might earn a multimillion-dollar reward - hundreds of whistleblowers have already received rewards.