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Gregg Shapiro Represents Whistleblower In $24.4 Million False Claims Act Settlement With Massachusetts Hospital

On May 16, 2024, the Department of Justice announced that it had reached a $24.4 million settlement with Cape Cod Hospital (CCH) to resolve allegations that Gregg Shapiro’s whistleblower client, a former physician at the hospital, had filed in a False Claims Act qui tam complaint. The whistleblower alleged that CCH had violated the False Claims Act by submitting claims for transcatheter aortic valve replacement (TAVR) procedures without complying with the National Coverage Determination (NCD) conditions for Medicare reimbursement of TAVR procedures.

We understand that the settlement amount represents the largest-ever False Claims Act recovery from a Massachusetts hospital. The whistleblower will receive approximately $4.36 million of the settlement amount.

In a TAVR procedure, medical providers treat aortic stenosis – a condition where a person’s aortic valve narrows, restricting blood flow from the heart to the rest of the body – by replacing the patient’s damaged valve with an artificial one. Before June 21, 2019, the NCD for TAVRs required that, prior to performing a TAVR procedure, two cardiac surgeons independently examine the patient face-to-face and evaluate the patient’s suitability for TAVR. After June 21, 2019, the NCD required that one interventional cardiologist and one cardiac surgeon perform the independent examination.

CCH employed its own interventional cardiologists, but contracted with Brigham & Women’s Hospital (BWH) to provide cardiac surgeons to CCH for various services, including TAVR procedures. Between 2015 and 2022, hundreds of TAVR procedures were performed at CCH. When a TAVR procedure was performed on a Medicare patient at CCH, CCH billed Medicare for the facility fee and the professional services fees for its staff, and BWH billed Medicare for the professional services fees for the contracted cardiac surgeon(s).

In or about November 2021, as a result of concerns the whistleblower had raised, BWH contacted CCH about conducting a review of TAVR procedures performed at CCH. In or about June 2022, BWH informed CCH that it would be issuing a full refund to Medicare on all TAVR cases performed at CCH on Medicare beneficiaries.

According to the settlement agreement, CCH performed an independent review of its TAVR claims and determined that, from a sample of 90 procedures, four Medicare claims did not comply with the NCD. CCH did not extrapolate from this result to the larger universe of Medicare claims it had submitted, and reimbursed Medicare for the four claims.

After the whistleblower filed his qui tam complaint, the government conducted its own review of an expanded sample of 105 TAVR procedures at CCH and determined that nearly half of those procedures had not complied with the NCD. The government then extrapolated this result to all of the approximately 800 TAVR claims that CCH submitted to Medicare during the relevant time period.

The whistleblower alleged, among other things, that CCH failed to comply with the Medicare Overpayment Rule, which requires Medicare providers to report and return any overpayment within 60 days after the date on which the overpayment was identified. 42 U.S.C. § 1320a-7k(d)(2)(A). The knowing failure to return an overpayment can violate the reverse false claims provision of the False Claims Act, 31 U.S.C. § 3729(a)(1)(G). In this instance, the False Claims Act settlement shows the risks of failing to comply with the Overpayment Rule when, as the whistleblower alleged, a Medicare provider has reason to believe that its prior Medicare claims were improper.

In the CCH case, the government resolved the whistleblower’s allegations less than two years after Gregg Shapiro filed the qui tam complaint on the whistleblower’s behalf. The whistleblower and his counsel commend the work of the lead lawyers from the Department of Justice, Andrew Caffrey, an Assistant United States Attorney in the United States Attorney’s Office for the District of Massachusetts, and Kimya Saied, a Trial Attorney with DOJ’s Civil Fraud Section.