Medical Center Agrees to Pay Almost $41 Million to Resolve False Claims Act Allegations

The Department of Justice announced on May 28, 2014, that Ashland Hospital Corp., doing business as King’s Daughters Medical Center (KDMC), agreed to pay $40.9 million to settle allegations that the company submitted false claims to Medicare and the Kentucky Medicaid program.

The Government alleged that the company submitted claims for payment for unnecessary coronary stents and diagnostic catheterizations and had violated the Stark Law through prohibited financial relationships with physicians who referred patients to the hospital.  Specifically, it was alleged that between 2006 and 2011 KDMC billed for  coronary stents and diagnostic catheterizations for patients who did not need them, falsifying records in the process to justify the procedures.  The Government alleged that KDMC violated the Stark Law “by paying certain cardiologists salaries that were unreasonably high and in excess of fair market value.”

In connection with the settlement, KDMC agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General.  Under the agreement, KDMC must make internal compliance reforms and commit to a third-party review of its claims for the next five years.

The Department of Justice press release can be found here:


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