U.S. ex rel. Hanvey vs. Sutter Health, et. al. 

In September 2014, a complaint was filed by Wilbanks & Gouinlock on behalf of Laurie Hanvey.  Ms. Hanvey was the former compliance officer of Sutter Medical Center in Sacramento, California.  While working as a compliance professional, the whistelblower gained inside knowledge with regard to a number of violations occurring within Sutter.  Her complaint alleges that Sutter Health overpaid Sacramento Cardiovascular Surgeons Medical Group for physician assistants and medical director agreements in violation of the Stark law.  Despite Ms. Hanvey’s protestations regarding the conduct set forth in her complaint, the bad conduct continued.

Sutter is a nonprofit with 24 hospitals, 5,000 physicians, and 48,000 employees.  Sacramento Cardiovascular Medical Group has three cardiovascular surgeons, Michael Ingram, Robert Kincade, and James Longoria.

After investigating for five years, the United States specified several contentions that confirmed numerous allegations within Ms. Hanvey’s whistleblower complaint.  More specifically, the Government contended that Sacramento Cardiovascular overpaid the neurosurgeons by stacking medical director agreements, paying excessive call coverage, and overpaying the neurosurgeons for the use of mid-levels.  The Sutter hospital was leasing the employees at an excessive rate and then the Sacramento Cardiovascular neurosurgeons were billing for the services of the mid-levels.

This case strikes a common theme with several other successful Wilbanks & Gouinlock Stark cases.  Hospitals routinely find a way to overcompensate key referring doctors to induce referrals.  The use of “free employees” is one way that hospitals can directly and indirectly impact physician compensation.

The case against Sutter Health, Sacramento Cardiovascular Medical Group and a number of other defendants will now proceed with litigation.  The settlements above represent only a fraction of the overall damages that Ms. Hanvey contends the Government incurred as a result of the collective illegal conduct of the other defendants set forth in the case.  The case will be litigated in the Northern District of California.

Click here to read the Wilbanks & Gouinlock press release regarding the Sutter Health settlement.