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KDMC Settles with U.S. and Kentucky Governments for Fraud

King’s Daughters Medical Center in Ashland, Kentucky has agreed to pay $40.9 million to the United States and Kentucky governments to settle claims that it made millions of dollars by falsely billing Medicare and Medicaid and for unnecessary cardiac procedures. This is the second such announcement from an Eastern Kentucky hospital in the past six months, as St. Joseph Hospital in London reached a $16.5 million settlement with the government to settle claims for unnecessary procedures in January.

The settlement follows claims by the U.S. Department of Justice and the Commonwealth of Kentucky that King’s Daughters “knew, deliberately ignored or recklessly disregarded the fact” that its cardiologists were inserting stents and performing catheritzations on patients who did not need them. 

The government alleged that between 2006 and 2011, King’s Daughters maximized reimbursements from Medicare and Medicaid by billing for numerous unnecessary procedures.  FBI special agent Perrye Turner issued a statement stating the “level of funds involved in this matter is staggering.  This money has been stolen from the patients and the taxpayers.”

The government also alleged that the physicians falsified medical records to justify the unnecessary procedures.  The hospital’s main cardiologist, Richard E. Paulus, who retired last summer,remains under criminal investigation for doing unnecessary stentings and other interventions, according to a report by Bloomberg BusinessWeek.  The hospital’s settlement agreement said its cardiologists knowingly falsified records to justify giving patients unnecessary procedures.

The Poppe Law Firm® is representing over 500 former King’s Daughters patients who may have had unnecessary and invasive cardiac procedures performed on them.  The fact the United States and Kentucky agree with our firm, and that King’s Daughters has chosen to settle, lends credence to our clients’ cases that they had unnecessary and harmful cardiac procedures performed against them.

The suit on behalf of injured patients in Ashland is in addition to nearly 200 ongoing suits in London, Kentucky against St. Joseph Hospital and cardiologists for unnecessary cardiac procedures.  One of the cardiologists in that case is currently serving a prison sentence for participating in the fraud and two other physicians are no longer licensed to practice medicine in Kentucky.  The first case in London is set to go to trial this October.

All of these unnecessary, costly, invasive, and harmful cardiology procedures and multi-million dollar settlements are in addition to a recent $3.7 million settlement between a chemotherapy practice in Elizabethtown with the U.S. and Kentucky governments just last week.  In the settlement, the government stated Drs. Rafiq Ur Rahman and Yusuf Deshmukh of Elizabethtown Hematology Oncology billed for unnecessary evaluations and extended chemotherapy times in order to receive additional reimbursements from Medicare and Medicaid. 

So far, all the settlements announced by hospitals across Kentucky were between the hospitals and the government (and the taxpayers the government represents).  However, not a single patient has been compensated by any hospital for being intentionally misled about their health, having his or her chest cut open, veins injected with radioactive dye, metal tubes inserted permanently in their chests, arteries cut out of their legs, or any of the other outrageously invasive and unnecessary cardiac procures performed on them.

At the Poppe Law Firm®, we think a person is injured when a medical professional lies to them to get consent, performs an invasive and unnecessary surgery, and then profits from it.  Patients should always be put ahead of profits—always.  Sadly, across Kentucky and across America, some doctors and hospitals have ignored their oath to “first do no harm,” and replaced it with an oath to “first charge a bill.”  While the taxpayers may have paid some of the bill, it is the patients that have paid for it most with shattered lives and broken bodies. 

Kirk Laughlin

Associate Attorney

Poppe Law Firm®

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