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Home›Methodism›US Department of Justice wins right to intervene in Methodist lawsuit

US Department of Justice wins right to intervene in Methodist lawsuit

By Ellen McCoy
March 15, 2022
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A judge has granted a request from the US Justice Department to intervene in a lawsuit accusing Methodist Le Bonheur Healthcare of perpetrating a kickback scheme and committing Medicare and Medicaid fraud.

Friday’s decision by the U.S. District Court in Middle Tennessee allows the DOJ to jointly pursue the pending lawsuit against Methodist.

However, the court said the intervention would only apply to current defendants, rebuffing the DOJ’s desire to bring the West Cancer Clinic back into the suit. The organization was dismissed from the lawsuit in 2021 after reaching a settlement with the original plaintiffs.

“The Court finds no good reason to reinsert West at this stage of the case – it would not only prejudice West, but would cause an undue delay in the proceedings,” according to the memorandum released Friday.

The federal government does not intend to pursue claims against two people currently listed as defendants – former Methodist System CEO Gary Shorb and former chief financial officer Chris McLean.

Gary Shorbe

CHRONOLOGY:West Clinic Methodist lawsuit outlines how alleged kickback scheme began and evolved

Tabrina Davis, vice president of branding and communications for Methodist, said the network was disappointed with the court’s decision, but “we remain confident that MLH’s affiliation with West Clinic was appropriate and reflected customary business agreements. and legal”.

“It is undisputed that this relationship has provided much needed cancer care to our community and provided the highest possible level of service to patients,” she said in an email. “The government’s belated decision to join the lawsuit two years after refusing to do so has not changed the case: the allegations in the lawsuit are baseless, and we will continue to vigorously defend ourselves against them as we go forward. as the court process unfolds.

Judge William L. Campbell Jr. said in the memorandum that the request to intervene was granted for several reasons, including allegations that the government received new evidence.

“The United States undoubtedly points to new evidence obtained through West’s cooperation pursuant to his settlement agreement,” according to Campbell. “Specifically, the government says West’s representatives admitted in post-installation interviews that West had not provided inpatient management services that Methodists had paid for under the service agreements.”

Methodist and West disputed the veracity of these allegations in a lawsuit. Last year, lawyers for West and Methodist also opposed the motion to intervene, saying the government had failed to provide evidence that “the extent of the alleged fraud had been expanded”.

“The Court is not persuaded that good cause requires new evidence as to the extent of the fraud,” Campbell wrote. “New evidence can add value to a case in multiple ways. Perhaps the alleged fraud becomes so large that it is impossible to ignore. Perhaps the scope of the alleged fraud remains the same, but the evidence proving the claims is getting stronger. Either of these developments (may) affect the assessment of a case.”

Midtown Memphis location of the West Cancer Center on Union Avenue.

The court also dismissed claims that Methodists would suffer any prejudice due to further delays in the case and having to respond to additional documents.

Davis said the lawsuit “amounts to an after-the-fact questioning of the level of payments that MLH made to the West Clinic for the valuable health care services that physicians provided to patients.”

Davis said the Methodist system remains proud of the work it has done to advance cancer diagnosis and treatment through its partnership with West.

How we got here

The original lawsuit filed in 2017 alleges that Methodist and West Clinic knowingly defrauded federal and state health programs and sought damages to Medicare and Medicaid programs exceeding $800 million.

He also claimed that Methodist paid doctors in the West more than $400 million over a six-year period as part of a kickback deal where doctors in the West encouraged patients to seek treatment at Methodist, then the entities shared the profits of the prescription drugs.

The lawsuit was filed by former Methodist University Hospital president Jeff Liebman and David Stern, former executive dean and vice chancellor of the University of Tennessee Health Sciences Center and Methodist board member. .

The case was initially filed under seal to give the government time to investigate, but was unsealed in 2019. At that time, the U.S. attorney’s office said it was not intervening in the prosecution at the time, but that he would continue the investigation. The case is a qui tam case, a legal construct allowing a private person to sue for the government, even if the government refuses to intervene.

April 02, 2020 - MEMPHIS, TN: A worker crosses Union Avenue using the Methodist University Hospital crosswalk.  Photo by Brandon Dill for MLK50 Memphis: Justice Through Journalism

The DOJ filed its motion to intervene in October. The department said it would then seek damages for the false claims submitted to Medicare and Medicaid.

The Justice Department said in the motion that it intended to allege Methodist paid West “as part of a multi-deal transaction” to bring the centers’ outpatient treatment facilities into Methodist, leaving clinic employees provide services to Methodist and “encourage West to refer his patients to Methodists.”

The DOJ also expressed a desire to bring West back into the trial after the department said it saw documents West provided to the prosecution, which the DOJ said described “new and additional evidence that defendants violated the (anti-bribery law)”. According to the motion to intervene, this evidence had not previously been seen by the DOJ.

Corinne S Kennedy covers economic development and healthcare for The Commercial Appeal. Se can be contacted by email at [email protected]

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