News & Insights


May 20, 2024

Health Headlines – May 20, 2024

Massachusetts Hospital Agrees to Pay $24.3 Million to Resolve Allegations that It Failed to Comply with Medicare Cardiac Procedure Rules

Cape Cod Hospital (CCH), which is based in Hyannis, Massachusetts, has agreed to pay $24.3 million to resolve allegations that it violated the False Claims Act. CCH allegedly submitted Medicare claims for transcatheter aortic valve replacement (TAVR) procedures while knowing that its evaluations of patients for TAVR procedures did not comply with Medicare billing rules. 

CCH began offering TAVR procedures in 2015 to patients who suffered from aortic stenosis (a heart condition that restricts blood flow from the heart to the body).  Medicare rules in effect at the time required hospitals to do at least three things before performing a TAVR procedure: have clinical personnel independently examine patients to determine if the patients were suitable for a TAVR procedure; document the rationale for the clinical personnel’s clinical judgment; and provide that rationale to the medical team that performed any TAVR procedure. The settlement resolves allegations that, between 2015 and 2022, CCH knowingly submitted claims to Medicare for TAVR procedures where physicians failed to document and share their clinical judgment with the medical team or where an insufficient number of physicians evaluated whether a patient was suitable for a TAVR procedure. 

In connection with the settlement, CCH entered into a five-year corporate integrity agreement (CIA) with OIG. The CIA requires annual review of CCH’s paid Medicare claims by an Independent Review Organization (IRO). 

As part of the settlement, CCH received cooperation credit under DOJ guidelines that take into account disclosure, cooperation, and remediation in False Claims Act cases. CCH’s cooperative actions included voluntary document productions, identifying relevant medical records, admissions of noncompliance, and implementing remedial measures. 

A copy of the settlement agreement is available here.

Reporter, Doug Comin, Atlanta, +1 404 572 3525,

Texas Court Dismisses FTC’s Claim Against Private Equity Firm

On September 21, 2023, the U.S. Federal Trade Commission (FTC) sued Texas-based U.S. Anesthesia Partners, Inc. (USAP) and its private equity investor, Welsh, Carson, Anderson & Stowe (Welsh Carson), in Texas federal court, accusing both parties of anticompetitive behavior in connection with its “roll-up strategy” in the hospital anesthesia market.  King & Spalding previously provided a Client Alert outlining the importance of this action and the potential implications for private equity firms.

On May 13, 2024, the Court held that Section 13(b) of the FTC Act does not permit the FTC to sue Welsh Carson solely because it has an ownership interest in USAP even if USAP may be subject to enforcement under Section 13(b) of the FTC Act.  The Court ruled that the FTC did not establish that Welsh Carson is violating or about to violate the antitrust laws and granted Welsh Carson’s motion to dismiss the FTC’s claim. The Court, however, did not grant USAP’s motion to dismiss, indicating it was premature to do so.

For additional information and insight, read the full King & Spalding Client Alert here.