Acadiana Business — February 2008
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Dont Ask Dont Tell
Leslie Turk

On Friday, Jan. 11, U.S. Attorney Donald Washington issued a statement much like the one he put out in August of last year when he announced that Our Lady of Lourdes Regional Medical Center would pay the U.S. government $3.8 million to settle claims it defrauded Medicare, Medicaid and other federal and state health plans from 1999 to 2003 by billing them for medically unnecessary cardiology procedures. Earlier this month, it was Lafayette General Medical Center’s turn, with the feds announcing that the hospital had agreed to pay $1.9 million for similar claims.

This time, however, the federal government dropped a bombshell: “Federal authorities alleged LGMC knew — from reports of hospital employees and from reports generated by its own internal review process — that a physician (Patel) was performing unnecessary procedures at its hospital yet deliberately failed to address the problem.” The U.S. attorney for the Western District took a stronger stand in the January release, noting: “Hospital providers like LGMC are not entitled to be paid by federal health plans for medically unnecessary procedures. And they may not simply rely on the representations — or in this case misrepresentations — of the physicians they allow to practice within their facilities. Providers like LGMC have a separate, independent and ongoing duty to review the practices and procedures of the physicians they credential, assess those activities in light of applicable standards of care, and consistently act in whatever manner is necessary to ensure the medical necessity of procedures and the accuracy and integrity of every claim the hospital submits.” Patel performed the bulk of his procedures from 1999 to 2003 at Lourdes, which Washington also alleges acted with “deliberate ignorance” in the Patel matter.

Apparently taken aback by the allegation it ignored warning signs — and unaware that Washington’s statement had been distributed when Acadiana Business’ sister publication, The Independent Weekly, first contacted the hospital for comment — LGMC quickly began defending itself, issuing a supplemental statement later that day. “Lafayette General Medical Center admits no wrongdoing in the case involving Dr. Patel,” wrote interim hospital Chief Executive Officer Patrick Gandy. “The hospital has agreed to a settlement with the federal government so that the matter is concluded amicably and to avoid a potentially long and costly lawsuit.

“The hospital takes claims of fraud very seriously,” he continued. “Processes are in place to review the actions of all physicians on staff. We remain confident that our safeguards to detect physician wrongdoing, including the re-credentialing and peer review protocols, meet or exceed all government and Joint Commission standards.” Washington, however, did not back down in a followup interview. “Our investigation was extensive,” he says, “and we talked to a lot of people in their organization.” Washington says the January settlement ends its investigation of LGMC for this particular set of claims (the actual amount the hospital overbilled on these claims was about $500,000; that amount was tripled and penalties added To get to the $1.9 million). However, Acadiana Business has since learned that LGMC is now in jeopardy of being excluded from participating in federal health care programs like Medicare and Medicaid because it has refused to sign a Corporate Integrity Agreement with the federal government. (As part of its settlement, Lourdes signed such an agreement. It is posted on the OIG’s Web site,, under “Fraud Prevention & Detection,” which has a section on individual CIAs.)

“While Lafayette General did enter into a settlement agreement with the

U. S. attorney’s office, they have opted not to enter into a Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services,” says Donald White, a spokesman for the OIG in Washington, D.C. “Under a CIA, the hospital is required to put meaningful and effective safeguards and reporting requirements in place to report non-compliance with federal regulators and to promote patient safety,” he says. “Quality of patient care is a top priority here for OIG. We will use all tools to address egregious instances of provider misconduct.” And while LGMC maintained in its follow-up statement that such controls are in place to identify problems like those allegedly associated with Patel’s practice, it is unclear why it has refused to sign a CIA, especially in light of the potential consequences. “In this specific case, OIG has retained authority to exclude LGMC from participating in federal health care programs,” says White. “That means they would not be able to bill Medicare or Medicaid.” In all likelihood, loss of participation in federal health care programs could shut LGMC down.

The OIG spokesman says he does not know why the hospital has taken this position.

LGMC’s communications director, Mark Attales, initially agreed to set up an interview with Gandy and board Chairman Bill Fenstermaker to discuss Washington’s allegations, but on Friday, Jan. 18, said the interim CEO did not have time for an interview.

“Patrick’s schedule just did not allow for an interview,” Attales says, reiterating that the hospital has made its position clear in the statements it released after Washington announced the settlement.

“Lafayette General has spent the past several years fully cooperating with the federal government in their investigation of Dr. Mehmood Patel and has agreed to deem a select number of his procedures performed at our hospital as not meeting our standards,” chairman Fenstermaker said in the first statement released by the hospital. “So that this matter concludes fairly, we have agreed to a settlement with the government.” Says White, “It’s very atypical for an organization not to enter into a CIA when there is an accompanying settlement agreement from the U.S. attorney as there is in this case.” He declined to speculate on when a decision will be made on LGMC’s ability to continue participating in federal health care programs. “I can’t put a time frame on that,” he says.

“Our investigation was extensive, and we talked to a lot of people in [Lafa yete General Medical Center’s] organization .” — U.S. Attorney Donald Washington,

After announcing that LGMC would pay the U.S. government $1.9 million to settle claims it defrauded Medicare, Medicaid and other federal and state health plans from 1999 to 2003 by billing them for medically unnecessary cardiology procedures.

While the questions of how much hospital officials at Lafayette’s two not-for-profit hospitals knew and when they knew it may never be answered, Washington is not alone in his opinion that both should have acted sooner. Dr. Christopher Mallavarapu, a local cardiologist who worked for Patel and became the government’s lead witness, says Lourdes And LGMC refused to intervene and stop Patel despite his warnings and what he says is proof the cardiologist was performing invasive procedures on healthy patients.

Mallavarapu moved to Lafayette in July 2003 for a job as an associate in Patel’s thriving cardiology practice across from Our Lady of Lourdes. “I was an employee,” says the 46-year-old who has practiced interventional cardiology since 1995. Within a couple of months, he became suspicious of the volume of patients Patel was seeing and the number of procedures being performed on them, so Mallavarapu started looking at the results of some patients’ angiograms.

An angiogram is an invasive procedure physicians use to study narrow, blocked, enlarged, or malformed arteries or veins in many parts of the body, including the brain, heart, abdomen and legs. The physician injects a dye through a thin, flexible tube called a catheter, threading the catheter into the desired artery from an access point.

This dye makes the blood flowing inside the blood vessels visible on an x-ray.

“I couldn’t understand why he was doing so many of them compared to everybody else,” Mallavarapu says, claiming Patel would then use the results of the angiogram to do additional procedures.

The angiogram x-rays confirmed his worst suspicions: he saw nothing wrong with some of the patients.

“I reported it to both hospitals right away ... I talked to the medical directors of both hospitals,” Mallavarapu says, noting that his first communication took place about September 2003.

“[I told them] that people were getting stented despite having normal angiograms.

I think both medical directors were aware that this was going on.

I knew that Lafayette General was aware. George Smith [LGMC’s medical director at the time], said he knew about it but he asked for a formal, written complaint.” Mallavarapu declined.

“I was an employee, and I knew I’d be fired if I filed a formal, written complaint, so I gave a verbal complaint, and his response was, ‘We all know [Patel] puts a stent in every orifice he can find.’ Even after they were alerted to his procedures, they still let him work.

“At the end of the day no one really wants to address it because it just involves a lot of issues,” he continues.

“Lourdes did not really respond till I told them, ‘Hey, I think the FBI is investigating you guys.’ And then they responded.” Mallavarapu says the FBI was al-

He went to work for Patel. He later learned that the FBI was alerted to a problem by a tech at Lourdes, who saw what he thought was a normal angiogram of a renal stent patient. He says the FBI seized records from Lourdes, but that did not stop Patel from practicing. “Even after the FBI went into Our Lady of Lourdes and took his films, he just moved all his cases over to Lafayette General and he kept on working despite other cardiologists telling him he that he should not be working there.” Acadiana Business requested an interview with Lourdes President and CEO Bud Barrow, but spokesman Berch Stelly says the hospital will not comment on the Patel matter. “We settled this over a year ago,” he says.

“We’re not going to talk about something we settled more than a year ago.” The Independent Weekly broke the story of Patel’s troubles in a Jan. 28, 2004, story. At that time, Lourdes would not say whether Patel had privileges at its hospital, information that is typically readily released (the paper later learned that he had lost privileges by this time).

LGMC said that his privileges for interventional cardiology had been suspended, but that he was still allowed to see patients at the hospital. A spokeswoman said the suspension was pending a review of three of Patel’s cases where the “medical necessity” was in question.

Frustrated that the hospitals did not give him any assurance the matter would be thoroughly investigated when he first contacted them — and armed with a 2003 statistic from The Dartmouth Atlas of Health Care that showed Lafayette, La., as the second busiest place in

“In this specific case, OIG has retained authority to exclude LGMC from participating in federal health care programs. That means they would not be able to bil Medicare or Medicaid.” — Donald White, spokesman for the Office of Inspector General of the U.S. Department of Health and Human Services

— Mallavarapu turned to his attorney, Alan Breaud of Lafayette, for advice.

“I told him if you don’t report it, you’re guilty of it,” Breaud says. So they called the U.S. Office of Inspector General.

“Things happened very quickly after that,” Mallavarapu says.

Patel has since had a class action brought against him and the two hospitals by scores of patients who claim he performed numerous unnecessary procedures on them, including stent, angiogram and angioplasties.

Lourdes settled the class action last year for $7.4 million.

The case against LGMC is ongoing.

Though it’s no secret he is the person who came forward, Mallavarapu, now a partner in Lafayette Heart Clinic, says he’s never spoken out about the case because he believes Patel deserves a fair trial (and also maintains that he’s never been contacted by any media).

“If there’s going to be a criminal trial, I don’t want to sway anyone’s opinion either way,” he says.

Working with federal officials, Mallavarapu sued both hospitals under the False Claims Act, a federal civil fraud statute that is the government’s principal tool in recouping money obtained by fraud or misrepresentation. The act allows witnesses to fraud to sue on behalf of the United States under what’s called a qui tam provision and share in the money that is recovered. For coming forward, Mallavarapu collected $760,000 in the Lourdes settlement and $380,000 from LGMC.

In addition to the civil fraud matter and class action against him, Patel was indicted in 2006 for numerous counts of fraud, claims that he bilked both government and private insurers for an estimated at $2.5 million by performing unnecessary procedures on more than 70 patients.

Patel, who has pleaded innocent, goes to trial later this summer.

His attorney in the criminal case, J. Michael Small of Alexandria, could not be reached for comment before press time.

Mallavarapu says many members of the medical community have been supportive of him — two wellestablished cardiologists, Drs. David Baker and Kevin Courville made him a partner in Lafayette Heart Clinic a year after he joined the practice in 2003 and he is a physician-owner in Heart Hospital of Lafayette — but he has been shunned by others for reporting Patel to federal authorities. “I think [some] of the cardiologists realized Patel was doing inappropriate procedures, but nobody really likes to turn in a colleague,” he says.

The South Bend, Ind., native says his only choice was to come forward. “It’ll always be part of me that I got dragged into this,” he says, “but the key thing is the patient comes first, and hospitals have to realize that.” Contact Leslie Turk at To comment on this story, e-mail