Cape Cod Hospital to pay $24.3 million to resolve allegations that it failed to comply with Medicare Cardiac Procedure Rules

HYANNIS – Cape Cod Hospital has agreed to pay $24.3 million to resolve allegations that it knowingly submitted claims to Medicare for transcatheter aortic valve replacement (TAVR) procedures that failed to comply with Medicare rules specifying the way in which hospitals were required to evaluate patient suitability for the procedures.

Beginning in 2015, Cape Cod Hospital began offering TAVR procedures for patients suffering from aortic stenosis, a serious heart condition that restricts blood flow from the heart to the rest of the body. A TAVR procedure involves replacing a patient’s damaged heart valve with an artificial one. Medicare rules at the time required that, prior to performing a TAVR procedure, hospitals engage specified clinical personnel to conduct an independent examination of prospective patients to evaluate their suitability for TAVR; document the rationale for their clinical judgment; and make the rationale available to the medical team performing the TAVR procedure.

The settlement resolves allegations that from November 2015 through December 2022, Cape Cod Hospital knowingly submitted hundreds of claims to Medicare for TAVR procedures that did not comply with the applicable Medicare requirements. In some instances, not enough physicians examined a patient’s suitability for the procedure, while in other instances the physicians failed to document and share their clinical judgment with the medical team responsible for the TAVR procedure.

“Hospitals that participate in the Medicare program must abide by applicable coverage and reimbursement rules,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will hold healthcare providers accountable when they knowingly fail to comply with Medicare reimbursement requirements.”

“Health care providers are expected to follow Medicare rules and bill properly,” said Roberto Coviello, Special Agent in Charge with the U.S. Department of Health and Human Services, Office of Inspector General. “We are committed to pursuing allegations of False Claims Act violations as we work to protect the integrity of the taxpayer-funded Medicare program, and we encourage the public to come forward with information about such conduct.”

In connection with the settlement, Cape Cod Hospital has entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), which provides for an annual review of its paid Medicare claims by an Independent Review Organization.

Cape Cod Hospital received credit under the Department’s guidelines for taking disclosure, cooperation, and remediation into account in False Claims Act cases. Among other actions, Cape Cod Hospital voluntarily produced materials, identified the relevant medical records, admitted that it failed to adhere to the applicable Medicare requirements and implemented appropriate remedial measures.

The claims resolved by the resolution announced today include claims that were brought under the qui tam or whistleblower provisions of the False Claims Act. Under the Act, a private party can file an action on behalf of the United States and receive a portion of any recovery. As part of today’s resolution, the whistleblower will receive approximately $4.36 million.

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to HHS at 800-HHS-TIPS (800-447-8477).

Acting U.S. Attorney Levy; Principal Deputy AAG Boynton; and HHS-OIG SAC Coviello made the announcement today. Assistant U.S. Attorney Andrew A. Caffrey, III of the Affirmative Civil Enforcement Unit handled the matter along with Trial Attorney Kimya Saied of the Department of Justice’s Fraud Section.
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