PITTSBURGH, PA, Dec. 21, 2018 – The US Department of Justice has joined a whistleblower lawsuit filed by Phillips & Cohen LLP that alleges a West Virginia hospital – under the direction of its chief executive officer and management firm – improperly paid millions in excessive compensation to doctors based on the volume or value of patient referrals to the hospital and the money generated for the hospital by the patients’ treatment.
The qui tam lawsuit against Wheeling Hospital, CEO Ronald Violi and his management firm, R&V Associates of Pittsburgh, was unsealed and made public today after the government filed notice with the federal district court in Pittsburgh that it would intervene in the case.
Wheeling Hospital engaged in the scheme, the “qui tam” (whistleblower) lawsuit says, as part of a plan to gain “monopolistic power and dominating market share” in the Ohio Valley region. For some physicians, compensation totaled over $1 million a year.
The hospital, through Violi, entered into these “lucrative but improper compensation arrangements with physicians that were well above fair market value, took into account the value or volume of services and/or were not commercially reasonable, in order to gain the physicians’ referrals,” the lawsuit says.
“The law generally requires that the amount of compensation hospitals pay doctors excludes from consideration the volume and value of patient referrals from those doctors,” said Amy Easton, a whistleblower attorney and partner in Phillips & Cohen’s Washington, DC, office. “This restriction is important so that doctors recommend treatment plans based on what’s best for patients rather than what’s best for profits.”
Both Easton and Jeffrey Dickstein, a whistleblower attorney and partner in Phillips & Cohen’s Miami office, commended the government for its excellent work on the case, particularly DOJ Trial Attorney Rohith Srinivas of the Frauds Section of the Civil Division and Assistant US Attorney Colin Callahan from the US Attorney’s Office in the Western District of Pennsylvania.
“The government’s investigation was impressive and thorough, despite tight court deadlines,” said Dickstein. “The Department of Justice’s intervention in this case demonstrates its commitment to protecting patients from the risks posed by kickbacks and hospital-paid referrals from doctors.”
The lawsuit alleges Wheeling Hospital, Violi and R&V Associates violated the Stark Law, which prohibits referrals based on improper financial relationships between doctors of Medicare patients and hospitals; the Anti-Kickback Statute and the False Claims Act, and by doing so defrauded Medicare and Medicaid of millions of dollars since 2008.
Phillips & Cohen filed the qui tam lawsuit under seal in December 2017 on behalf of Louis Longo, a Wheeling Hospital executive vice president. Andrew Stone is local counsel.
The False Claims Act allows private citizens to sue entities that are defrauding the government and recover funds on the government’s behalf. Under the law, whistleblowers are offered protection and rewards – 15 percent to 25 percent of the amount recovered as a result of their case, when the government joins it.
The case is captioned US ex rel. Louis Longo v. Wheeling Hospital, Inc. et al., No. 17-cv-1654 (W.D. Pa.).