King’s Daughters Medical Center: Allegedly Unnecessary Stents and Falsified Records

The $40.9 million King’s Daughters Medical Center stent settlement resolved allegations that the hospital billed Medicare and Kentucky Medicaid for unnecessary coronary stents and diagnostic catheterizations. The government alleged that physicians falsified medical records to justify the procedures. The chart that should explain the treatment allegedly supplied the excuse for it.

Ashland Hospital Corp., doing business as King’s Daughters Medical Center in Ashland, Kentucky, agreed to the payment the Justice Department announced on May 28, 2014. The settlement covered both the cardiac billing allegations and alleged excessive compensation for referring cardiologists.

Records Allegedly Falsified to Justify the Procedures

The government alleged that King’s Daughters physicians performed coronary stents and diagnostic catheterizations on patients who did not need them and falsified the medical records to justify the procedures. It said those claims generated millions of dollars in Medicare and Kentucky Medicaid reimbursements between 2006 and 2011.

The settlement agreement’s account of the hospital’s role goes further. The government contended that King’s Daughters knew about, deliberately ignored or recklessly disregarded both the unnecessary procedures and the falsified records. Its allegation reached the hospital’s awareness of the conduct, as well as the physicians’ treatment decisions.

An insider who knows how a false justification reached the chart, and who knew it was false, can explain the part the finished bill conceals.

This is where the patient’s interests and the taxpayer’s interests meet. In the alleged scheme, the patient underwent an unnecessary intervention and the public programs paid for it. The same false record served both purposes: explaining why the procedure happened and supporting the hospital’s claim.

Why Cardiologist Pay Was Part of the Settlement

King’s Daughters also settled allegations that it paid certain cardiologists more than their services were worth and billed for the patients they referred. The government alleged that those financial relationships violated the Stark Law.

The business behind physician compensation extends beyond the physician’s own fees. Employed physicians bring referrals that feed a hospital’s imaging, laboratory and surgical business. In hospital outpatient care, Medicare pays a facility fee as well as a professional fee. The hospital therefore has a financial interest in where the physician sends the patient, as well as in the physician’s own work.

The agreement connects those parts explicitly. It alleges commercially unreasonable, above-market compensation, referrals for hospital services including cardiovascular care, and claims to Medicare and Medicaid for those services. The government’s position was that the improper financial relationships made those referred claims ineligible for payment.

The compensation allegations concerned employed cardiologists’ pay from 2010 through 2012, with different periods for different physicians. For some, they extended beyond the unnecessary-procedure billing period. Treating the whole case as a single set of stent claims misses the separate question of what the hospital paid its referring physicians to do.

Kentucky’s Share and Five Years of Claims Review

The agreement allocated $1,018,380 to Kentucky as its share of the settlement.

King’s Daughters also agreed to a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General. It required substantial internal compliance reforms and independent review of claims to federal health care programs for five years.

King’s Daughters and the Other Kentucky Cardiac Case

King’s Daughters was a government-initiated case, with no whistleblower reward. Saint Joseph Hospital in London, Kentucky, reached a separate $16.5 million settlement earlier in 2014 after three Lexington cardiologists brought a qui tam case and the government joined it.

In its Saint Joseph London announcement, the Justice Department alleged unnecessary stents, pacemakers, bypass operations and diagnostic catheterizations, along with hospital awareness of the unnecessary procedures. It also alleged sham management agreements that benefited referring cardiologists.

The Saint Joseph London whistleblowers were to receive $2.46 million collectively. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

What Other Procedure Cases Show

Other hospital unnecessary stent fraud cases show why the clinical record, the hospital’s bill and the financial arrangement each deserve attention. In EMH Regional Medical Center and North Ohio Heart Center’s case, a former cath lab manager was the whistleblower over allegedly unnecessary angioplasty and stents. The government’s false-claims allegations concerned insufficient occlusion: patients had heart disease, but their blood vessels were not blocked enough to require the particular procedures.

At Blessing Hospital, the alleged unnecessary coronary stents produced payments for the facility component of cardiac catheterization procedures. The hospital disclosed the matter itself. At Desert Regional Medical Center, the alleged unnecessary devices were cardiac loop recorders. These cases put the hospital’s own payment and the particular procedure at the center of the account.

The separate St. Joseph Medical Center in Towson, Maryland, case linked alleged unnecessary stents with alleged referral payments disguised as service agreements. Its independent cardiac catheterization review was to assess the medical necessity and appropriateness of interventional procedures. The whistleblower complaint made the alleged bargaining power behind the payments unusually plain: Midatlantic, it alleged, used its hold over referrals to make St. Joseph pay kickbacks passed off as outcomes data research and managed care guidance.

The allegation gives an insider a concrete connection to recognize: referrals on one side of the arrangement, payments described as services on the other.

The same questions about necessity and hospital knowledge reach beyond cardiac care. CHI Franciscan and St. Joseph Medical Center in Tacoma settled allegations of hospital billing for surgery at more spinal levels than necessary and for unnecessary spinal fusions.

At Sanford Health, the government alleged that colleagues repeatedly warned the hospital about a neurosurgeon’s unnecessary procedures involving devices in which he had a financial interest. It alleged that Sanford continued employing him, allowing him to profit from the devices and billing federal healthcare programs for the surgeries.

What an Insider Adds to the Cardiac Record

An insider can connect the clinical justification, the hospital’s claim and what management knew. That is the value of an account from someone who saw how the record was created or how concerns about it reached the hospital. The King’s Daughters agreement puts both the alleged falsification and the hospital’s knowledge in the same account of the billing.

RAND Corporation’s 2024 report, Methodologies to Measure Upcoding in Provider Settings: A Scoping Review, found that studies identifying upcoding in individual admissions or visits drew on additional claims and medical-record information.

For someone who works with cardiac records, the same approach means connecting what the patient record said with the claim it supported. The insider can also explain who supplied the justification, who challenged it and how the hospital responded. The numbers show what the hospital billed. The people inside can explain how it came to bill it.

When You Know How the Cardiac Record Was Written

If you know who supplied a false justification for a cardiac procedure, you know something the finished chart hides. Speak with our whistleblower experts about how that justification reached the chart. We build your hospital billing case with you, bring in whistleblower lawyers who know cardiac procedures and falsified records, and remain your partners through its resolution.