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Poppe Law Firm® Client Awarded $21.3 Million Against CHI/St. Joseph London for Unnecessary Pacemaker

Jury returns $21M verdict vs. Catholic Health

In the latest blow for Catholic Health Initiatives in Kentucky, a jury has returned a $21.2 million verdict against the company and its St. Joseph Hospital London for conspiring with cardiologists to perform unnecessary heart procedures.

After a seven-day trial in Laurel Circuit Court, the jury Wednesday night awarded the money, which included $20 million in punitive damages, to Kevin Wells, a milk truck driver who said one of the doctors unnecessarily implanted a pacemaker in his chest.

He alleged the hospital, after forming a joint venture with local cardiologists that provided incentives for them to perform certain procedures, failed to put in any safeguards to ensure the procedures were necessary, said Hans Poppe, a Louisville lawyer who was one of his attorneys.

The jury found that the hospital and its parent company, Denver-based CHI, were negligent, failed to obtain informed consent, violated the Kentucky Consumer Protection Act, and engaged in a conspiracy to aid and abet the doctors to commit an unlawful act.

Poppe said evidence showed the company anticipated making $90 million over three years from heart procedures and that executives were given bonuses based on productivity and revenue.

David McArthur, a spokesman for the hospital company, said it was disappointed in the verdict and is considering its options, while Todd Thompson, its lead counsel, said he couldn’t comment without his client’s consent.

The suit was one of hundreds filed by patients who alleged they were the victims of unnecessary surgery and implantation of stents and other devices. Two previous trials resulted in defense verdicts, but this was the first case in which the jury considered claims against the hospital, Poppe said.

In 2014, Saint Joseph Health System agreed to pay the federal government $16.5 million to resolve civil allegations that it submitted false or fraudulent claims to the Medicare and Kentucky Medicaid programs for a variety of medically unnecessary heart procedures. U.S. Attorney Kerry Harvey said at the time that the alleged conduct violated a fundamental trust and squandered “scarce public resources set aside for legitimate health care needs.”

Dr. Anis Chalhoub, who implanted the pacemaker in Wells, was indicted in June on criminal fraud charges of implanting the devices into patients without “sufficient need or justification.” Federal prosecutors said the alleged crimes were related to a scheme for which another cardiologist, Dr. Sandesh Patil, was sentenced to 2½ years in prison in 2013. He was accused of exaggerating the severity of patients’ illnesses so he would be paid for treating them.

The civil jury wasn’t told about the indictment of Chalhoub or Patil’s conviction, Poppe said.

McArthur said the hospital ended its relationship with Chalhoub in 2014.

►RELATED: $1.45M verdict upheld in indigent man’s death 

Patil forfeited his medical license for at least five years; Chalhoub is still practicing, now in Jefferson County, and is the subject of a pending investigation by the Kentucky Board of Medical Licensure, said Leanne Diakov, its general counsel.

The hospital claimed at trial that the procedure was medically necessary, that the doctor acted independently of the hospital; that doctors, not the hospital, makes medical decisions; and that it was trying to strengthen cardiac care in a region historically underserved by that specialty.

Poppe said the hospital  also claimed that it ramped up heart procedures to generate revenue so it could continue its mission of caring for poor patients.

He also said the company claimed it had no choice but to hire foreign doctors – all of the cardiologists were foreign born – because of a shortage of such specialists and that it had to pay them incentives to get them to move to London rather than Lexington or Louisville.

The jury found that Chalhoub also was negligent, but he and the other members of the cardiology group had already settled with the plaintiffs.

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