CHARLESTON, W.Va. — Federal prosecutors are intervening in a whistleblower lawsuit filed against Wheeling Hospital.
The prosecutors agree with claims that Wheeling Hospital solidified its finances by overpaying physicians who then steered millions of dollars in services back to the hospital.
The intervention filed Monday in U.S. District Court for the Western District of Pennsylvania accuses Wheeling Hospital of fraudulent schemes to bill the federal Medicare program.
Prosecutors allege the scheme was under the watch of R & V Associates, which was hired in 2006 to improve the hospital’s financial situation. The hospital had lost more than $55 million from 1998 to 2005.
The relationship with R & V was spearheaded by Michael Bransfield, the former bishop of the Diocese of Wheeling-Charleston. Bransfield was barred from the ministry earlier this month because of separate investigation into allegations of sexual harassment of adults and financial improprieties.
During the first five years under the management of R & V, Wheeling Hospital achieved operating profits of nearly $90 million.
The finances first came under scrutiny in a federal lawsuit filed Dec. 22, 2017, by Louis Longo, a former executive vice president at Wheeling Hospital. That filing was initially under seal.
“This change in management successfully reduced its significant losses and steadily turned the hospital into an extremely profitable venture,” wrote lawyers for Longo. “However, several of the arrangements that drove this newfound excessive profitability were illegal.”
The hospital filed its own countersuit against Longo this March 13, saying he did not raise red flags about the hospital’s financial practices during his time as a financial consultant or when he was actually employed by the hospital.
The countersuit alleges that Longo’s claims are false and that he made them to receive “a quick monetary settlement.”
Wheeling Hospital contends it was paying physicians fair market value, particularly to compete with medical facilities in nearby Pittsburgh and Morgantown.
“We will thoroughly defend these baseless claims, while remaining fully committed to serving the good people of the Northern Panhandle every single day,” stated Heidi Porter, Wheeling Hospital’s vice president of hospital and regulatory affairs.
Federal prosecutors, in Monday’s 47-page filing, contend Wheeling Hospital committed fraud.
The filing cites the Stark Law, which prohibits hospitals from billing Medicare for services referred by physicians who have improper financial relationships with the hospital.
It also cites the Anti-Kickback Statute, which prohibits offering or paying anything of value to induce the referral of items or services covered by Medicare or other federal programs.
“Improper financial arrangements between hospitals and physicians can influence the type and amount of health care that is provided,” stated Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.
“The department is committed to taking action to eliminate improper inducements that can corrupt the integrity of physician decision-making and drive up healthcare costs.”