Cape Cod Hospital Pays $24.3 Million to Settle Medicare Fraud Claims Over Heart Procedures

Cape Cod Hospital in Hyannis, Massachusetts has agreed to pay $24.3 million to resolve allegations that it violated the False Claims Act by knowingly submitting claims to Medicare for certain cardiac procedures that failed to meet federal requirements.

The U.S. Department of Justice announced the settlement recently, resolving claims that from November 2015 through December 2022, the hospital improperly billed Medicare for hundreds of transcatheter aortic valve replacement (TAVR) procedures. TAVR is a procedure to replace a damaged heart valve in patients with aortic stenosis.

According to the DOJ, Medicare rules at the time required hospitals to have specified clinical personnel independently evaluate a patient's suitability for TAVR prior to the procedure. Hospitals also had to document the clinical rationale and make it available to the medical team performing TAVR.

Federal investigators alleged that Cape Cod Hospital routinely failed to follow these Medicare requirements. In some cases, not enough physicians examined patients, while in others the rationale was not properly documented and shared, violating conditions for reimbursement.

"Hospitals that participate in Medicare must abide by applicable coverage and reimbursement rules," said Brian M. Boynton, head of the DOJ's Civil Division. "The department will hold healthcare providers accountable when they knowingly fail to comply."

The settlement stems from a whistleblower lawsuit filed under the False Claims Act by Dr. Richard Zelman, a former Cape Cod Hospital physician. He will receive around $4.36 million from the recovery as a whistleblower reward.

As part of the settlement, Cape Cod Hospital admitted to failing to follow Medicare's TAVR requirements and has agreed to increased oversight and claims reviews for five years.

"Medicare permitted coverage for this cardiac procedure only under certain conditions to ensure patient safety. Cape Cod Hospital ignored those rules and received millions to which it was not entitled," said U.S. Attorney Joshua Levy in Massachusetts. "This ensures patient safety is prioritized over profits."

The settlement illustrates the government's heightened focus on policing fraud and improper billing of federal healthcare programs by providers.

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