On Monday, June 24, the Department of Justice (DOJ) announced a record $15 million settlement to resolve claims that Baylor St. Lukes Medical Center, Baylor College of Medicine, and Surgical Associates of Texas were billing Medicare for concurrent surgeries.

The settlement is the result of an investigation that began in 2019 upon the filing of a qui tam, or whistleblower, lawsuit. The whistleblower alleged that Doctors Joseph Coselli, Joseph Lamelas, and David Ott engaged in concurrent, overlapping surgeries between 2013 and 2020, in violation of Medicare regulations and informed consent regulations.

In other words, as stated the DOJ press release, the surgeons were running two operating rooms at the same time and “delegating key aspects of extremely complicated and risky heart surgeries to unqualified medical residents.”

Baylor Surgeons Allegedly Violated Medicare Rules And False Claims Act

In addition to putting patient safety at risk, the teaching hospital and surgeons are alleged to have violated Medicare rules and federal anti-fraud regulations:

1. Medicare billing rules require teaching physicians to be present during critical and key portions of surgical, high-risk, or other complex procedures.
2. To bill for overlapping surgeries, the physicians must document whether they were physically present during critical portions of the procedure. The three heart physicians who performed these surgeries at St. Luke’s allegedly falsely attested that they were physically present for the entire operation.
3. Filing a false billing claim with Medicare is a violation of the False Claims Act, a federal regulation that prohibits the submission of false claims to the government.
4. In addition, patients were not informed that the surgeon would be leaving the room to perform another operation.

While the charges were dismissed and none of the defendants were found guilty, the $15 million recovery is the largest settlement to date involving concurrent surgeries.

“This settlement reaffirms the importance of Medicare requirements governing surgeon presence and ensuring that no physician – no matter how prominent or successful – can skirt around the rules,” said U.S. Attorney Alamdar S. Hamdani.

Medicare Rules For Overlapping Surgeries:

The practice of running overlapping or concurrent surgeries was first exposed in a 2015 Boston Globe story. In response, the U.S. Senate Finance Committee issued a bipartisan report “Concurrent and Overlapping Surgeries: Additional Measures Warranted”, calling for more rigorous monitoring of teaching hospitals for compliance with Medicare’s billing rules.

What Are Medicare’s Rules On Concurrent Surgeries?

The Centers for Medicare & Medicaid Services (CMS) Medicare Claims Processing Manual explains that to bill for surgical, high-risk, or other complex procedures, the teaching physician must be present during all critical and key portions of the procedure and be immediately available to furnish services during the entire procedure.

The phrase “immediately available” is not defined, but the CMS manual indicates that a surgeon performing another procedure would not be considered “immediately available”.

The teaching surgeon is obligated to document whether he or she was physically present during the critical portions of the procedures. If the teaching surgeon is not able to be present, he or she must arrange for another qualified surgeon to immediately assist the resident if needed.

In this case, according to the lawsuit, the three surgeons performed overlapping surgeries and billed the government for the surgeries as if they were physically present the entire time.

False Claims Act Prohibits Filing Inaccurate Medicare Claims

The False Claims Act (FCA) prohibits the submission of claims for payment to Medicare or Medicaid that the person knows or should know are false or fraudulent. Filing false claims may result in fines of up to three times the program’s loss plus civil penalties.

The FCA defines “knowing” to include not only actual knowledge but also instances in which the person acted in deliberate ignorance or reckless disregard of the truth or falsity of the information. No specific intent to defraud is required.

In this case, the surgeons allegedly filed inaccurate medical records with Medicare claiming that they were present during the entire surgical procedure.

The FCA also contains a whistleblower provision that allows a private individual to file a lawsuit on behalf of the United States and entitles that whistleblower to a percentage of any recoveries.

What Is A Qui Tam Or Whistleblower Lawsuit?

A qui tam lawsuit, also known as a whistleblower lawsuit under the False Claims Act, empowers private citizens to sue on behalf of the government to recover funds obtained through fraud. Whistleblowers could be current or ex-business partners, employees or independent contractors, patients, or competitors.

Here’s how it works:

1. The whistleblower files the lawsuit under seal, meaning it remains confidential initially. The government then investigates the allegations.
2. If the government finds merit in the case, it can take over the lawsuit and prosecute it.
3. The government may choose not to pursue the case. In some instances, the whistleblower can then choose to proceed with the lawsuit on their own.

In this case, the U.S. Attorney’s Office, the Officer of Inspector General for the U.S. Department of Health and Human Services (HHS-OIG), and the FBI investigated the allegations, found merit, and turned the case over to the U.S. Attorney’s Office for prosecution.

Qui tam lawsuits offer whistleblowers a significant incentive to report fraud. If the government recovers funds due to the lawsuit, the person who initiated the lawsuit can receive a reward of up to 30 percent of the amount recovered. In this case, the whistleblower will receive over $3 million.

Patient Informed Consent Laws And Guidelines

Per CMS’ Hospital Interpretive Guidelines for Informed Consent, a properly executed informed consent form for the operation must be in the patient’s chart prior to a surgery, except in emergencies. This protects the patient’s right to make an informed decision.

For surgeries in which residents will perform important parts of the surgery, CMS guidelines recommend physicians inform patients that:

• It is anticipated that physicians who are in approved post-graduate residency training programs will perform portions of the surgery, based on their availability and level of competence;
• It will be decided at the time of the surgery which residents will participate and their manner or participation, and that this will depend on the availability of residents with the necessary competence; the knowledge the operating practitioner/teaching surgeon has of the resident’s skill set; and the patient’s condition;
• Residents performing surgical tasks will be under the supervision of the operating practitioner/teaching surgeon; and
• Based on the resident’s level of competence, the operating practitioner/teaching surgeon may not be physically present in the same operating room for some or all of the surgical tasks performed by residents.

Texas law also has informed consent laws. The Informed Consent Statute of the Texas Civil Practice and Remedies Code provides that, “for a patient to recover against a provider for lack of informed consent, the patient must show that the provider was negligent in failing to disclose the risks or hazards that could have influenced a reasonable person in making a decision to give or withhold consent.”

According to the settlement, the patients were unaware their doctor was leaving for another operating room.

“In this case, doctors gambled with their patients’ care, during complicated open-heart surgeries no less, compromising quality of care over quantity and then falsely billed Medicare for reimbursement of services they improperly delegated,” said FBI Special Agent in Charge Douglas Williams, a leader of the investigation team. “We hope today’s civil settlement announcement represents accountability for doctors and hospitals everywhere.”

Physicians, Hospitals: Review Informed Consent And Surgery Policies

Given the media attention and recent law enforcement actions – and to enhance patient safety – teaching physicians and hospitals should review existing policies and practices for compliance with Texas and federal regulations and in line with current best practices.