DoJ settles with N.J. provider for $8.3M over illegal cardiology kickbacks

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After years of cardiologists pleading guilty and subsequent settlements, the University of Medicine and Dentistry of New Jersey (UMDNJ) has agreed to pay the government $8.3 million to settle allegations that the provider illegally paid kickbacks to cardiologists and caused the submission of false claims to Medicare, according to the U.S. Department of Justice.

UMDNJ's University Hospital, located in Newark, is a state-licensed Level 1 Trauma Center. To maintain funding and accreditation from the state, University Hospital was dependent on the annual performance of a certain number of cardiac procedures, including cardiac caths and cardiothoracic surgery.

The government alleged that beginning in 1995, University Hospital was experiencing a decline in these procedures, and to remedy the problem, embarked on a program to bring in more cardio surgery patients through part-time employment contracts with a number of community cardiologists. The government alleges that those employment contracts served as vehicles to pay illegal kickbacks to the cardiologists for their referrals.

In 2008, the government reached settlements with six of the cardiologists who had allegedly received kickbacks through their employment contracts with UMDNJ. Two other cardiologists pleaded guilty to criminal embezzlement charges in connection with the employment contract scheme.

The DoJ also said it has filed a civil suit against two other cardiologists who allegedly had illegal employment contracts with UMDNJ.

"The Department of Justice continues to pursue those who make referrals based on financial, rather than patient health, considerations," said Marc Larkins, first assistant U.S. Attorney for the District of New Jersey.

The settlement was the result of a coordinated effort among the U.S. Attorney's Office for the District of New Jersey, Affirmative Civil Enforcement Unit; the Commercial Litigation Branch of the Justice Department's Civil Division; the FBI; and the U.S. Department of Health and Human Services, Office of Inspector General.