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Wheeling Hospital agrees to $50 million settlement concerning Medicare fraud claims

WHEELING, W.Va. — Wheeling Hospital, Inc. has agreed to pay the United States a total of $50,000,000 to resolve claims that it violated the False Claims Act by knowingly submitting claims to the Medicare program that resulted from violations of the Physician Self-Referral Law and the Anti-Kickback Statute, the Justice Department announced Wednesday.

According to the Justice Department, in this case, the United States alleged that from 2007 to 2020, under the direction and control of its prior management R&V Associates, Ltd. and Ronald Violi, Wheeling Hospital systematically violated the Stark Law and Anti-Kickback Statute by knowingly and willfully paying improper compensation to referring physicians that was based on the volume or value of the physicians’ referrals or was above fair market value.

“Improper financial arrangements between hospitals and physicians can influence the type and amount of health care that is provided,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division in a release.

“The department is committed to taking action to eliminate improper inducements that can corrupt the integrity of physician decision-making.”

VIEW: Department of Justice news release

The Physician Self-Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions, the Justice Department added.

The Anti-Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid, and other federally funded programs. Both the Stark Law and the Anti-Kickback Statute are intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient, a release said.

“Our office is committed to ensuring that health care providers in the Northern District of West Virginia abide by the law,” said Bill Powell, United States Attorney for the Northern District of West Virginia in a release.

“We are pleased this settlement will enable Wheeling Hospital to resolve these prior False Claims Act violations and continue to provide a full range of healthcare services to patients in the area.”

Wheeling Hospital CEO Douglass Harrison released a statement Wednesday saying, “The settlement was in the best interest of the long-term viability of the hospital and the community.

“Prolonging the lawsuit would have paralyzed the ability of the hospital to attract the best physicians and to make the necessary capital improvements to ensure that the highest quality health care continues to be provided in the Upper Ohio Valley.”

There was a whistleblower complaint filed in 2017 by a former Executive Vice President of Wheeling Hospital, Louis Longo, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit, in which the settlement stems from.

The False Claims Act also permits the government to intervene and take over the lawsuit, as it did in this case as to some of Longo’s allegations, the Justice Department said.

Longo will receive $10,000,000 of the settlement.

“This case is significant for the amount that a single hospital is paying to settle allegations that it violated the Stark Law, which was designed to prevent patient steering and physician self-referrals,” said Amy L. Easton, a whistleblower attorney and partner in Phillips & Cohen’s Washington, DC, office said in a release.

This matter was handled on behalf of the government by the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Northern District of West Virginia and Western District of Pennsylvania, the Department of Health and Human Services Office of the Inspector General, and the Federal Bureau of Investigation.

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