WV Hospital & Marketing Consultant Sued for Elaborate Kickback Scheme

Case: A new DOJ lawsuit accuses a West Virginia non-profit hospital and its business consultant of seeking to dominate the Ohio Valley market by bribing physicians for referrals. The scheme began in 2005, according to the complaint, when Wheeling Hospital hired R&V Associates to turn around its sagging financial fortunes. The plan: Enter into contracts providing beyond market value compensation to the region’s leading OB/GYN, radiology oncologists, cardiologists and pain management physicians for referring patients to the Hospital. As a result of these deliberate Antikickback Statute and Stark Law violations, the Hospital went from $50 million in losses to massive profits. Significance: The complaint, which arose from a 2017 whistleblower lawsuit, details the contractual arrangements with the physicians who eagerly accepted the millions of dollars’ worth of overpayments even though they knew it was illegal, and how R&V and the Hospital carefully tracked individual physician referral records and adjusted their compensation accordingly. Meanwhile, the Hospital has filed a breach of fiduciary lawsuit against its former executive VP, who’s charged with carrying out the scheme with R&V.