Mass. hospital to pay 'largest ever' payout to whistleblower (2024)

Cardiologist Dr. Richard Zelman is expected to receive $4.36 million in a $24.4 million settlement after Cape Cod Hospital was found to have knowingly filed claims for heart valve procedures that did not comply with Medicare rules.

The payout to Zelman is the largest-ever false claims act recovery from a Massachusetts hospital, according to Gregg Shapiro, who represents the whistleblower.

“Dr. Zelman appreciates that the government conducted a thorough investigation and that the case has been successfully resolved,” Shapiro told MassLive.

Zelman was director of the hospital’s Heart and Vascular Institute from 2018 until he was fired in September 2022, according to The Boston Globe.

The $24.4 million settlement resolves allegations that between November 2015 and December 2022, the hospital knowingly submitted hundreds of claims to Medicare for transcatheter aortic valve replacement, or TAVR procedures, that did not follow Medicare requirements, Joshua Levy, Acting United States Attorney, said in a statement.

TAVR procedures are for patients who suffer 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. At the time, Medicare rules required that hospitals engage specified clinical personnel to conduct a separate, independent examination of prospective patients to evaluate their suitability for TAVR before the procedure, Levy said.

Zelman alerted quality of care concerns in a 2022 lawsuit. Zelman later claimed he was wrongfully terminated after bringing up his concerns, according to the Cape Cod Times. The lawsuit was later dropped, the outlet reported.

Hospitals are required to document the rationale for their clinical judgment before the procedure and then make that rationale available to the medical team performing the TAVR procedure.

Sometimes, there were not enough doctors to examine a patient’s suitability for the procedure, while at other times, doctors did not document and share their clinical judgment with the medical team who operated TAVR procedures, according to Levy’s statement.

Those involved included interventional cardiologists and cardiac surgeons in the hospital as well as those from Brigham & Women’s Hospital but contracted by Cape Cod Hospital.

“Medicare permitted coverage for this newly developed cardiac procedure only under certain conditions to ensure patient safety,” Levy’s statement said. “Cape Cod Hospital ignored those rules and received millions of dollars from Medicare to which it was not entitled. This conduct persisted for years despite internal warnings. This investigation and settlement ensure that patient safety is prioritized over a hospital’s bottom line.”

In a statement to MassLive, Bruce Johnston, Cape Cod Hospital’s board chairman emphasized his support of chief executive Michael Lauf, touting him as contributing to the hospital’s “excellent care” and enhancing the hospital’s “operational and financial position.”

“Though it is unfortunate to be in this situation, the Board of Trustees remains confident in and supportive of the organization’s leadership,” Johnston said.

“Under Lauf’s leadership, Cape Cod Hospital has grown both in reputation and in size and now eagerly anticipates the opening of a new patient care pavilion, which will house a state-of-the-art cancer center, consolidate the Hospital’s many cardiology programs, and add 32 more medical/surgical beds to address increasing demand,” he later added.

• Read more: Cape Cod Hospital to pay $24.3M for breach of Medicare rules

Along with the settlement, Cape Cod Hospital has begun a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services, Office of the Inspector General to give an annual review of its paid Medicare claims by an independent review organization, Levy’s office said.

Cape Cod Hospital also received credit under the Department’s guidelines for taking disclosure, cooperation and remediation into account in False Claims Act cases, according to Levy’s office. The hospital voluntarily produced materials, identified the relevant medical records, admitted to failing to adhere to the applicable Medicare requirements and implemented the appropriate remedial measures, among other actions.

These claims were resolved under the provisions of the False Claims Act, where a whistleblower can file an action on behalf of the United States and receive a portion of any recovery, Levy’s office said. The whistleblower will receive about $4.36 million as part of this resolution.