Maryland’s MedStar Health Inc. and Associates Will Pay $35 Million to Settle Medicare Fraud Allegations Involving Kickbacks

MedStar Health Inc. and two hospitals affiliated with it have agreed to pay $35 million to resolve Medicare fraud allegations. According to a lawsuit filed by three cardiac surgeons, between 2006 and 2011, MedStar offered kickbacks to MACVA, a cardiology group based in Maryland, in exchange for lucrative referrals of Medicare beneficiaries. When the referred patients underwent cardiac procedures, MedStar submitted false claims for payment to the Medicare program.

Upon the announcement of the settlement, U.S. Attorney for the District of Maryland, Robert K. Hur, said in a statement that “medical care providers who put their patients at risk and waste taxpayers' dollars in order to line their own pockets" would no longer be tolerated.  

The lawsuit was initially filed by Stephen D. Lincoln, MD, Peter Horneffer, MD, and Garth McDonald, MD, three cardiac surgeons from Baltimore who learned about the alleged kickbacks through their participation in Cardiac Surgery Associates.

Medicare fraud costs taxpayers billions of dollars every year. It is only thanks to the courage of whistleblowers that this type of misconduct can be exposed. In the case of MedStar’s alleged misconduct, it was not only physicians who blew the whistle. The recent settlement also resolved a previous whistleblower suit filed by three patients of a MedStar surgeon, John Wang,  who allegedly performed unnecessary cardiac surgery on them. The procedures were all covered by Medicare.

The whistleblowers, in this case, will receive an undisclosed award for providing the DoJ with original information about fraud. Under the False Claims Act, the total payout for all three whistleblowers could go as high as $8,750,000 million.

MedStar made no admission of guilt, claiming that it only settled the case to “avoid protracted and distracting litigation," a standard type of statement for corporate defendants in this type of situation. For Special Agent Maureen R. Dixon from the Office of the Inspector General,  healthcare fraud is a severe matter as patients “expect their doctors will make recommendations based on sound medical practice – not payoffs.” Dixon vowed to continue to “protect patients and taxpayer-funded government health programs.”

Medicare is designed to provide healthcare services to those who cannot afford them. When providers defraud the program to “line their own pockets,” as Hur put it, they are also jeopardizing its capacity to assist those in need.

Individuals with information about Medicare fraud have a duty to step forward and expose wrongdoers. Besides offering rewards, the False Claims Act includes solid anti-retaliation provisions designed to protect the livelihood and well-being of whistleblowers.

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.


Medicaid Fraud Hotline: 888.742.7248 or Report Online
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