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ETHC agrees to pay $2.9 million

East Tennessee Heart Consultants will pay out almost $3 million in restitution to the United States, the state of Tennessee, insurance companies and patients as the result of a civil lawsuit settlement, the U.S. Attorney’s office announced during a press conference Thursday, Jan. 4.

The settlement agreement states ETHC, an association of 42 cardiology physicians with offices at 9330 Park West Blvd., 10810 Parkside Drive and several other locations in Knoxville and surrounding counties, received overpayments from patients, federal healthcare agencies and insurance companies, then failed to account for these overpayments or refund them.

James R. “Russ” Dedrick, U.S. attorney for the Eastern District of Tennessee, said the nearly $3 million, $1.5 million will go to federal programs, such as Medicare and Medicaid, while a little more than $200,000 would go to the state. More than $1 million was allocated as refunds due to 11,220 ETHC patients while about $170,000 would be refunded to insurance companies, such as Blue Cross/Blue Shield.

As a provision of the settlement, ETHC has entered into a comprehensive five-year agreement with the Office of Inspector General of the U.S. Department of Health and Human Services to ensure its continued compliance with the federal health care benefits program.

ETHC issued a statement Thursday afternoon in which it claimed the company had done no wrong.

“ETHC fully cooperated with the governmental agencies to address these allegations,” the company said in its statement. “The investigation did reveal accounting procedure issues which have been addressed and resolved by E-T-H-C.”

“The primary purpose of this lawsuit is to restore the funds to Medicare and Medicaid,” said assistant U.S. attorney Elizabeth “Betsy” Tonkin. “This investigation did not reveal any quality-of-care problems.”

Tonkin said this case was a result of a civil qui tam lawsuit filed by Kristi Moore and Valerie Byrd in November 2003.

Dedrick said the term qui tam refers to a civil lawsuit filed on behalf of the United States by other persons.

Tonkin said Moore and Byrd were then employed in the billing department of ETHC as patient financial service representatives. They noticed the overpayment and notified authorities on the matter.

“The qui tam provision allows the case to be filed under seal, which means the defendants don’t know about the investigation,” she said.

Tonkin said “possibly as early as nineteen ninety-five, ” ETHC had a policy to retain overpayments from Medicare, Medicaid, TRICARE and FEHB programs and to not issue refunds unless the program specifically requested refunds.

A. William Mackie, assistant U.S. attorney, said the company began cooperating with federal authorities when it learned of the investigation in November 2005. This was one of the reasons the U.S. Attorney’s office opted to allow a pretrial diversion in the case. Mackie said ETHC would have to follow strict guidelines for 18 months; otherwise the government could prosecute on charges of health care fraud as well as theft and embezzlement in connection with health care.

Under the terms of the settlement agreement, Moore and Byrd received nearly $335,000 jointly for their role in filing the qui tam complaint and cooperating with the investigation.

“We feel like this is a terrific settlement,” Tonkin said. “We hope other health care practitioners take note of this and they make sure their accounting practices are in order.”

Dedrick declined to comment on whether there are other ongoing investigations of a similar nature for other health care practitioners in the Knoxville area.

“If there are, then we will go after them,” he said.


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