Doctors at some of the largest US teaching hospitals are blowing the whistle on a lucrative practice they say endangers patients: Surgeons scheduling two or even three operations at virtually the same time, leaving during critical portions, then billing Medicare for work they didn’t do.
(Bloomberg Law) — Doctors at some of the largest US teaching hospitals are blowing the whistle on a lucrative practice they say endangers patients: Surgeons scheduling two or even three operations at virtually the same time, leaving during critical portions, then billing Medicare for work they didn’t do.
A review of more than a dozen federal and state lawsuits offers a rare glimpse into a tight-lipped profession. Many include separate allegations of bribery, kickbacks, and improper compensation. Some reveal closed-door debates by hospital administrators over the ethics, safety, and staggering profits brought by concurrent surgeries.
The University of Southern California’s hospital system is accused of billing for thousands of cases – costing taxpayers “hundreds of millions of dollars” – where the teaching physician left residents unattended to perform even spine and brain surgeries. When one doctor confronted a department head about an “embarrassingly high” rate of surgical injuries at one of its facilities, the administrator responded, according to the lawsuit:
“Well, that’s where the residents go to practice on the poor folks.”
In Tennessee, the former head of Erlanger Health System’s orthopedic surgery unit and two colleagues filed a False Claims Act lawsuit, unsealed in March, accusing the hospital of endangering patients while systematically defrauding Medicare. And in April, the University of Pittsburgh Medical Center paid $8.5 million to settle Justice Department claims a head surgeon’s overlapping practices “abuse patients’ trust, inflate anesthesia time, (and) have resulted in serious harm to patients.”
Concurrent surgery and double-billing have been going on for years, doctors and researchers say, but court rulings and settlements involving Massachusetts General Hospital elevated the issue while providing a blueprint for current cases. Now, whistleblower lawsuits alleging fraud far more rampant—with even greater danger to patients—are playing out around the country.
All began with top doctors, anesthesiologists and surgeons first bringing their concerns to hospital administrators. Most ended with the doctors losing their jobs—either being fired or quitting with the writing on the wall—before filing False Claims Act lawsuits that can drag on for years.
At their core, the lawsuits allege schemes designed to enrich hospitals while keeping tens of thousands of patients in the dark about who was really doing their surgery.
“The hospital had a careful calculus of trying to maintain income for the institution and provide care,” Dr. Stephen Adams, a family physician and Erlanger’s former chief information officer told Bloomberg Law. He is now one of three plaintiffs in a False Claims Act lawsuit in the Eastern District of Tennessee. “The compliance department had a phrase ‘management accepts risk.’ I think concurrent surgery and fraudulent billing was in the ‘management accepts’ risk category.”
Lack of Supervision
While surgeons are allowed, even encouraged, to delegate some work with proper supervision, all of the lawsuits accuse doctors of handing patients over to residents then walking away. Under Medicare rules, the lead surgeon must be present for all critical parts of an operation, and be immediately available or have a qualified backup in the room if things go wrong.
Instead, surgeons often go to operating rooms on other floors and buildings or even leave hospitals entirely to perform a second or third operation, the lawsuits allege. Erlanger Chief of Staff Dr. Christopher Young acknowledged to a colleague that billing records claiming doctors stayed for entire surgery sessions were “just fraudulent,” according to the lawsuit. He also lamented that the hospital put itself in jeopardy because it doesn’t comply with “this backup surgeon thing.”
Attorneys for Erlanger argued in court that the case should be dismissed because, among other things, the plaintiffs’ case made assumptions without providing specific, first-hand accounts of wrongdoing. A federal judge has yet to rule on their motion.
Erlanger, in a statement to Bloomberg Law said it “strongly denies the claims” and “looks forward to the truth coming out during the court proceedings.”
Erlanger, the nation’s seventh largest teaching hospital, performed at least 8,500 overlapping or concurrent surgeries in less than four years, records included with the lawsuit allege, with unsupervised residents doing some of the work.
Some of Erlanger’s residents were so unskilled that the hospital’s own doctors said in secretly recorded conversations that they were concerned about leaving them alone in operating rooms. One said he was “moderately scared” of the hospital’s fourth-year residents, and called two others “terrifying.” Another surgeon said he trusted only about one-third of a recent crop of trainees.
“Resident 3 is scarier,” Dr. Dirk Kiner, an Erlanger orthopedist, told a colleague, according to the lawsuit. “He’s got this spasmodic index finger. You know, he makes an incision, and it’s just, oh my God, stop.”
A False Claims Act lawsuit filed against USC Keck Hospital and the affiliated Los Angeles County Medical Center makes similar claims. It alleges a decade-long fraud, with doctors submitting bills for as many as five surgeries on the same day and time at different facilities
The complaint by Dr. Justin Cheongsiatmoy, filed under seal in 2018, outlines dozens of specific examples of patients being injured or dying. In one case, a teaching physician left even after being “explicitly informed of (an) intraoperative tear of the patient’s artery,” that caused internal bleeding during spinal surgery, the complaint alleges.
“In direct violation of all patient safety and billing standards, USC routinely scheduled the same teaching surgeon to “supervise” simultaneous surgeries occurring concurrently at both USC Keck Hospital and LAC+USC Medical Center,” attorney Alice Chang wrote. The two hospitals are about one mile apart. “USC and its affiliates routinely perpetrated fraud for financial gain at the expense of patient safety.”
The lawsuit alleges that Keck, Los Angeles County Medical Center, and other affiliates altered billing records and deleted internal chat logs to hide the fraud and dangers to patients. Attorneys wrote that they uncovered “hundreds of millions of dollars stolen from taxpayers …. hundreds of avoidable patient deaths and injuries and thousands of unsupervised, unsafe surgeries below the standard of care.”
Chang also turned over dozens of additional cases to federal and California investigators. The Justice Department opened an investigation in 2018 and has subpoenaed hospital records, Assistant U.S. Attorney Frank D. Kortum wrote in court filings.
USC said in a statement to Bloomberg Law that “The University investigated the billing issues when it became aware of them and made reimbursements where billing mistakes were made. The university disputes the other allegations in the lawsuit.”
Chang didn’t respond to phone calls and emails seeking comment. The sides are engaged in settlement talks, according to recent court filings. The Justice Department wouldn’t talk about the case.
Under the False Claims Act, lawsuits alleging fraud against the government are filed under seal on behalf of DOJ, which then investigates. The plaintiffs get up to 30 percent of any money recovered.
Cases can remain hidden for years while the probe continues and DOJ debates whether to take up the cause. That’s what happened in the USC probe, where the government has so far declined to intervene while actively monitoring settlement talks, court records show. In Tennessee, federal investigators have also declined to join the Erlanger lawsuit while reserving the right to do so in the future.
A Billing Quagmire
Medicare billing is based on a system of hundreds of codes to define certain procedures, time and complexity of the surgery. Bills are submitted by hospitals, not the surgeons. Hospitals then pay millions of dollars annually to doctors.
The Justice Department settled with the University of Pittsburgh this year after alleging surgeon James Luketich routinely walked out in the middle of surgery, leaving “anesthetized patients for hours at a time while he attends to other matters.”
The hospital, which settled without acknowledging responsibility, allowed Luketich to double-book surgeries and place patients in danger because his star power brought in cash, the lawsuit said.
“(UPMC) regularly sacrificed patient health in order to increase surgical volume…. to ensure that Luketich—and only Luketich—performs certain portions of surgical procedures, and to maximize profit,” Justice Department lawyers wrote.
Lenox Hill hospital in New York agreed to pay the Justice Department $12.3 million in 2019 to settle charges that it billed for hundreds of surgeries that Dr. David Samadi never performed. Prosecutors said Lenox Hill paid Samadi as much as $5 million per year.
“Think of it like Las Vegas, where they pay to bring in big acts, then make money off the drinks and gambling,” said attorney Reuben Guttman of the Washington, D.C. firm of Guttman, Buschner and Brooks, who represents the Erlanger plaintiffs. “The star doctors bring in the patients, and hospitals make their money off the room and board and by keeping those doctors happy.”
Early Warnings
The current lawsuits, legal arguments and scrutiny of double-booking surgery took root years earlier at Harvard University’s revered teaching institution. Mass General Hospital’s internal fight over double-booking would spark a Boston Globe Spotlight series, which in turn led to a 2016 Congressional investigation.
The hospital’s orthopedics unit had embraced concurrent surgeries as a profit center more than most hospitals. Doctors complained, saying it led to unnecessary surgery and bad practices that put patients in danger. None were more vocal than Dr. Dennis Burke, a surgeon who operated on athletes, politicians and celebrities. He was good at his job, and secure enough to fight a system he viewed as dangerous.
Around that time, Mass General anesthesiologist Dr. Lisa Wollman was also sounding alarms, saying patients were forced to undergo anesthesia far longer than medically prudent because doctors were off doing other operations.
Mass General responded by hiring former U.S. Attorney Donald Stern in 2011 to conduct an independent review. The hospital said Stern found no problems with the practice, but refused to release the report, even to its own staff.
Eventually, federal and state judges forced Mass General to produce the document, ruling the hospital forfeited its right to attorney-client confidentiality because it shared the Stern report with a public-relations agency. The report didn’t back the hospital’s claims.
In 2019, the hospital settled Burke’s wrongful termination state lawsuit for $13 million and offered his job back. He refused. Wollman continued her fight in federal court, and last year settled her False Claims Act lawsuit with the Department of Justice for $14.6 million.
Wollman, who was awarded about 30-percent of that total, refused to settle until Mass General updated its informed consent forms and changed the way it told patients that their surgery may be conducted by someone other than their own doctor.
It provided a small victory to a long and difficult process, said Wollman, who spent 20 years at Mass General. She still defends the hospital, saying she never saw the abuses and overlapping surgeries in any other part of the institution.
“This was orthopedic surgeons gone bad,” Wollman said in an interview with Bloomberg Law.
“My naïve self wanted the practice to stop. When we started talking to the (Boston) Globe, we were hoping the sunshine would get them to change,” Wollman said. “If the Globe story wouldn’t get them to stop, then it was clear that the only way to get them to stop was to sue. The very least I could do was get them to change informed consent.”
Because each hospital has its own pre-surgery consent form, patients must be vigilant to make sure they read the document, and be assertive when talking to their own surgeon about the possibility that residents will participate in part of all of the operation, doctors said.
Assessing the Risk
Studies have reached different conclusions about the efficiency and safety of overlapping surgeries, although all agree that overlapping surgery increases the time a patient is put under anesthesia, increasing the likelihood of complications down the road.
Doctors and academics contacted by Bloomberg Law would not comment on the specific details of the lawsuits but said the allegations, if proven, represent gross violations of medical ethics and are dangerous to patients. They were particularly concerned that residents, at any stage of their training, operated without direct supervision.
“At a teaching hospital, you have to make sure they are ready to do surgery on their own at the end of five years,” said Dr. Seth Leopold, professor of orthopedics and sports medicine at the University of Washington. “There has to be a progression, to let somebody have the stick at a certain point, but you have to be in the room observing and training them, both for their sake and the patient’s. I watched them like a hawk.”
Dr. Bheeshma Ravi, a research scientist at the University of Toronto, who co-authored one of the most comprehensive studies of overlapping hip surgeries, said supervision and informing the patient of the process is key. They should be used sparingly, under the eye of instructors.
“There is some nuance, because people may define critical portions of a surgery differently. But you still need supervision, and you always have to make sure the patient understands exactly what will be going on in the operating room,” Ravi said.
His study followed more than 2,500 patients for up to a year, as opposed to previous studies that looked at only the first few weeks after overlapping surgery. It found that the longer surgeries overlap, the worse it is for patients.
“There was an approximately 90% increase in the risk for surgical complications at 1 year,” according to the 2017 study of 2,500 hip surgeries published in the Journal of American Medicine. “Increasing duration of overlap with another procedure is associated with progressively increasing risk for complications.”
Blowing the Whistle
Orthopedic Surgeons Dr. Scott Steinmann and Dr. Julie Adams, who are married, were already nationally recognized when Erlanger recruited them from the Mayo Clinic in Minnesota. Erlanger lauded the arrival of Steinmann, who had been a professor at Mayo’s college of medicine, was a U.S. Navy Commander, and held a senior position at U.S. Naval Medical Center in Bethesda.
Adams, a hand surgeon, also taught at Mayo, served on boards of national medical associations and was co-Chair of the Ethics and Professionalism Committee for the American Association of hand surgeons.
After signing contracts with Erlanger and to teach at the University of Tennessee College of Medicine in 2019, they quickly became alarmed, according to their attorney, Traci Buschner of the Washington, D.C. firm of Guttman, Buschner and Brooks. The couple found that doctors were billing for as many as three overlapping surgeries in violation of Medicare rules, leaving residents unsupervised and falsifying records, according to the complaint.
They thought the hospital would investigate and change its policies. That’s how things would have been done at their previous jobs and in the U.S. Navy, where Steinmann was a commander, they said. None expected the pushback they received.
”I think all of us thought we had to keep calling attention to the problems. We just needed to right the ship,” Steinmann said.
In March 2021, on the advice of hospital administrators, they filed a report with the hospital’s internal ESafe system, the complaint alleges. Two days later, they were fired.
“I think that many times you have this suspended belief that of course it’s going to work out, that they will have the same anxiety about what’s going on as I do,” Adams said. “You don’t realize until it’s more or less too late that they don’t share the same values about patient care as you do.”
Steinmann said they never set out to be martyrs.
“We became engaged in the process and didn’t stop and say, ‘wait a second, if this keeps going, and if I can’t get traction, I’m going to lose my job,’” he said.
Leopold, the University of Washington professor, praised the surgeons at Erlanger, USC and elsewhere for speaking up.
“The only way we can keep our profession is we maintain our ethical standards,” Leopold said. “I know it isn’t easy, but if things are as they seem to be, good for them.”
The Cases Are United States of America et al v. University of Southern California, C.D. Cal., No. 2:18-cv-08311
United States of America et al v. Chattanooga Hamilton County Hospital Authority et al, E.D. Tenn., No. 1:21-cv-00084
DOE et al v. LUKETICH et al, W.D. Pa., No. 2:19-cv-00495
Wollman v. Massachusetts General Hospital Inc. et al, D. Mass., No. 1:15-cv-11890
UNITED STATES OF AMERICA, ex rel., et al. v. David B. Samadi, M.D., et al., S.D.N.Y., No. 1:17-cv-07986
To contact the reporter on this story: John Holland at jholland1@bloombergindustry.com
To contact the editor responsible for this story: Gary Harki at gharki@bloombergindustry.com
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