Fremont hospital pays $8.5M

ProMedica Memorial settles over false claims allegations

Memorial Hospital in Fremont.

FREMONT — ProMedica Memorial Hospital in Fremont will pay the government $8.5 million to settle allegations the hospital submitted false Medicaid and Medicare payment claims for services involving patient referrals from two doctors.

An agreement signed last week stems from discoveries made during a 2012 internal audit by the nonprofit hospital before it joined the ProMedica system, which officially occurred in January. The hospital disclosed the alleged violations to federal government agencies, resulting in an $8.5 million settlement between the hospital and federal and state governments.

DOCUMENT: Read the executed settlement

The Fremont hospital paid ophthalmologist Dr. Dale Solze “above-market rates” for intraocular lenses he used in cataract surgeries performed at the hospital, according to the settlement agreement. The practice continued for nearly a decade, from August, 2002, to May, 2012.

The doctor allegedly purchased the lenses and resold them to the Fremont hospital “at inflated prices” according to a news release issued by the U.S. Department of Justice.

A second allegation involves “improper remuneration” provided to Dr. Naren Lakshmipathy, a physician who operated Memorial Pain Management LLC. as a joint venture with the hospital from April, 2006, to August, 2012.

The settlement document does not provide a detailed description of the allegations, but states the hospital “submitted false claims for payment to the Medicare and Medicaid programs.”

“The price of such arrangements can be very costly to the nation’s health care system, taxpayers, and provider organizations,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson in a written statement. “So, we are pleased that Memorial stepped forward to disclose these improper financial relationships and is working to avoid future occurrences.”

The hospital dissolved the pain management company, according to the settlement agreement.

ProMedica issued a statement commending hospital leaders for disclosing the incidents.

“The discrepancies that were found were operational in nature, and the caliber of patient care provided was never brought into question. All of the services provided to patients were reasonable and necessary,” according to ProMedica’s statement.

Spokesmen for the health care organization refused to answer a reporter’s questions.

Dr. Solze and Dr. Lakshmipathy could not be reached for comment.

A spokesman for the U.S. Attorney’s Office for the Northern District of Ohio in Cleveland, which helped with the case, also could not be reached for comment.

The state of Ohio will receive $600,384 of the settlement amount paid to the U.S. government because the state paid some of the Medicaid claims in question.

The agreement states the settlement is not “an admission of liability,” and it does not release any claims of criminal liability.

Contact Vanessa McCray at: vmccray@theblade.com or 419-724-6065, or on Twitter @vanmccray.