$40.9 Million to be Paid by King’s Daughters Medical Center to Resolve False Claims

June 2nd, 2014 by Qui Tam

The Justice Department announced that Ashland Hospital Corp. d/b/a King’s Daughters Medical Center (KDMC) has agreed to pay nearly $41 million for needless medical procedures, between 2006 and 2011, including coronary stents and diagnostic catherizations that were submitted falsely to the Kentucky Medicaid and federal Medicare programs.  It is also alleged that the hospital had a prohibited financial relationship with physician to refer patients to the hospital.

Allegedly, the physicians were fabricating medical records to substantiate these unwarranted procedures which generated millions of dollars of reimbursements through the Medicare and Medicaid systems.  It was also alleged that KDMC violated the Stark Law by paying physician salaries well above fair market value.

KDMC has agreed to sign a Corporate Integrity Agreement with HHS-OIG, obligating the hospital to undergo extensive internal compliance reforms and to commit to a third-party review of any claims to the federal health care program over the next five years.  Approximately $1,018,380 will be given to The Commonwealth of Kentucky for the state’s portion of the recovered funds.

The FBI, HHS-OIG, Kentucky Office of the Attorney General, Medicaid Fraud and Abuse Control Unit, the Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Kentucky worked together in this investigation.  No determination of liability has been found under the claims of the settlement agreement.

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