LOUISVILLE, Ky. (WHAS11) -- They're documents University of Louisville Medical Center doesn't want you to see, but were leaked to WHAS 11 News by a confidential source.
Contained in them are allegations of kickbacks to doctors and violations of the federal Stark Law that could potentially affect the hospital's ongoing merger with Jewish Hospital and Catholic Health Initiatives.
At University of Louisville Hospital, officially called "University Medical Center", the talk is gloom and doom when it comes to the hospital's current economic situation.
U.M.C. President James Taylor shared that message last month at a community forum.
“We are convinced that if we don’t merge, we are going to decline. And what that means is less ability to serve the underserved, less ability to provide those unique services," Taylor said.
Over the summer, University Medical Center stopped providing services to indigent patients from outside Jefferson County, citing a $20 Million shortfall in its indigent care fund.
But the I-Team discovered, through reviewing hundreds of documents, that U.M.C. knowingly turned its back on millions of dollars.
Beverly Glascock, a nurse and trial attorney who opposes the merger, reviewed some of the documents we received from a whistleblower.
“They said there was a $20 Million shortfall in that indigent care fund. That $20 Million could easily have been made up with the money these documents show,” said Glascock.
The documents show that millions of Medicare dollars...your tax money...went to wealthy physician groups in the form of kickbacks.
Kickbacks can be cash, goods or services which are received improperly by participants in federal healthcare programs.
“The biggest problem with kickbacks is it encourages physicians to perform services that may not be needed,” said Glascock.
Kevin Colquitt is a nationally prominent attorney who represents whistleblowers in healthcare cases.
“The delivery of healthcare is about helping patients to get better,” said Colquitt. “When decisions are made based on kickbacks or other financial arrangements, the patient's best interest isn't at its heart.”
Hospitals caught participating in kickback schemes could face big fines and criminal charges.
The Health Alliance of Cincinnati was fined $108 Million for alleged kickbacks.
St. Joseph's Hospital in Towson, MD, which is owned by merger partner Catholic Health Initiatives, paid $22 Million to settle similar claims.
Documents we obtained concerning U.M.C. indicate University Emergency Medical Associates, whose doctors serve the hospital's emergency department, got millions of dollars in free labor from hospital employees.
Here's how the documents show the arrangement worked for years:
U.M.C. paid residents, physicians' assistants and nurse practitioners.
A separate group, University Emergency Medical Associates is made up of doctors who run the Emergency Department for U.M.C.
Our documents show the doctors' group bills Medicare for services it provides as well as for work provided by U.M.C. employees.
But the hospital never gets paid.
All the money ends up going to doctors group.
“It just doesn't make sense to me at all,” said Glascock. “The only thing that I guess you could say is that they're obviously trying to sweeten the pot for probably some of the physicians and faculty members.”
University Emergency Medical Associates denies doing anything wrong.
But in an e-mail from 2006, U.M.C.'s Director of Managed Care told hospital administrators they should be getting money that, instead, was going to the doctors' group.
At that time, he estimated the loss to U.M.C. at more than $1 Million a year.
Four years later, a memo by the attorney for U.M.C. told the doctors group to stop billing for services performed by U.M.C. employees.
Other documents show other doctors received free office space and computer services from U.M.C.
“The word that comes to my mind is greed. It reeks of a system that's kind of gotten out of control,” said Glascock.
“We're just spending way too much money on healthcare,” said Colquitt. “If this is one of the problems, one of the issues that's costing us taxpayers tens of billions of dollars, it's something worthwhile to look into, enforce and eliminate these violations.”
So we could find out how University Medical Center resolved these issues, we filed an open records request back in July.
The hospital denied it, on the basis that the hospital "is not a public agency."
We appealed to Kentucky Attorney General Jack Conway's office, which issued a ruling in our favor last month saying the records need to be turned over.
But rather than complying with the Attorney Genera’s Order, U.M.C. answered our request with a 500 page civil lawsuit, which names WHAS 11 News as a defendant.
Similar ones went to The Courier Journal and the American Civil Liberties Union.
Meaning, no doubt, that more money that could help treat indigent patients instead went to legal fees.
“They want to keep the documents secret, for sure,” said Glascock. “They do not want the public to see them. You can only assume that there's stuff in there that would not be very palatable if the public did see them.”
The I-Team has learned that U.M.C.is in the process of self-reporting many of these alleged violations in order to minimize the hospital's possible damages, if violations are found.
In their lawsuit against us, the hospital's attorneys make it clear there is an ongoing investigation.
They hospital issued the following statement today, “University hospital has previously self-reported Stark concerns and is aware of the on-going review by the Office of the Inspector General. Our team is working jointly with the United States Attorney's Office for the Western District of Kentucky as well as OIG and welcomes the prompt and thorough examination of the issue.”
The parties involved in the merger hoped to have it finalized by Dec. 15, but the governor and the Catholic diocese of Louisville must give final approval.
