Kentucky cardiologist invokes wartime statute in Medicare kickbacks case legal news

A whistleblower cardiologist from Kentucky wants a federal judge to bar a move to dismiss his lawsuit alleging a kickbacks scheme that defrauded Medicare, arguing that the statute of limitations should be extended because his lawsuit was filed while the U.S. was at war in Iraq.

Dr. Tullio Emanuele accused Medicor Assoc., several affiliates and 5 former colleagues of engaging in a scheme to defraud the government by setting up fake "medical directorship contracts" to pay the physicians $75,000 a year in return for virtually no work, according to court documents.

Emanuele sued Medicor and the other doctors on behalf of the government in October 2010 under the False Claims Act, alleging that the defendants ran scheme "to obtain reimbursement for cardiac and vascular surgical and diagnostic procedures that were not medically necessary, that were overbilled, or otherwise improperly billed" from about from June 1, 2001, to May 31, 2005, according to the documents.

The alleged scheme "to pay kickbacks to and to engage in unlawful relationships with physicians to induce patient referrals" involved the allegedly fraudulent contracts, 1 of which Emanuele signed, according to his lawsuit.

"That contract purports to require Medicor, through its physicians, to provide ‘medical supervision and direction of rehab/ restorative cardiovascular services’ … in exchange for $75,000 per year," according to the lawsuit. "The contract was for a 1-year term and renewed annually during the time that [Emanuele] was employed at Medicor."

The directorship allegedly involved providing 400 hours a year of unspecified duties (about 33 hours a month), but no time cards or other billing records other than pre-prepared "time study forms" signed "a few times a week" covering 2-week periods, according to Emanuele’s complaint. The time study forms were "pre-prepared by an administrator at Medicor, that was not based on information provided by [Emanuele], that was not contemporaneous, that was often inaccurate and invariably overstated the amount of time attributed to the services documented. Moreover, the services documented in the time studies did not correspond to duties identified in [Emanuele’s] medical director contract," according to the complaint.

Emanuele claimed to have spent less than 10 hours each month discharging his duties as a medical director, consisting of "conducting a monthly committee meeting that lasted approximately 1 hour, along with a couple of hours of prep time and a couple of hours of follow-up time, according to the documents.

At least 6 other contracts were allegedly inked by the defendants with other physicians, resulting in insurance payments of $525,000 per year, Emanuele alleged.

"The aforesaid contracts were sham arrangements intended to disguise the actual purpose, which was to provide a vehicle for Hamot to pay kickbacks to Medicor and Flagship CVTS to buy the loyalty of the physicians and insure a steady stream of patient referrals," according to the lawsuit.

The defendants moved to dismiss the case, arguing that Emanuele lacks standing to bring the suit and that the 6-year statute of limitations has already expired.

Emanuele countered last week that the statute of limitations should be dated back to October 2002, "the date on which hostilities with Iraq began," according to court documents.

"[Emanuele] is filing this supplemental opposition to call to the court’s attention a recent decision from the Court of Appeals for the 4th Circuit, holding that the statute of limitations for claims under the FCA is tolled under the Wartime Suspension of Limitations Act while the country is at war," according to the documents. "If the WSLA applies to this case, the statute of limitations extends back to Oct. 11, 2002."

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