Aria to pay $3 million to resolve alleged violations of False Claims Act

Aria Health Systems Inc., operator of Aria hospitals in Frankford, Torresdale and Bucks County, has agreed with the U.S. Attorney to pay more than $3 million to resolve alleged violations of the False Claims Act.

As part of the Dec. 23 agreement, Aria did not accept any liability for the civil claims and denied any such liability, according to a prepared statement from the U.S. Attorney’s Office.

Aria agreed to pay $564,700 to resolve claims that a cardiologist performed unnecessary invasive procedures on inpatients and outpatients at Aria’s Torresdale campus between Oct. 1, 2012, and April 15, 2013. Aria also agreed to pay $2.5 million to resolve alleged False Claims Act violations regarding the payment of compensation to physicians that was in excess of their fair market value, specifically compensation paid to a cardiac thoracic surgeon from 2012 to ’14, and claims regarding the purchase of a trademark name during Aria’s December 2012 acquisition of an orthopedic group.

Aria became aware of certain complaints regarding the cardiologist in January 2013 and hired an independent organization to review the medical treatment for some of his patients. As a result of the review, the doctor agreed to cease performing invasive cardiac procedures at the end of February 2013 and to terminate his employment with Aria as of April 15, 2013. After further review, Aria self-disclosed this matter to the federal government in March 2014. The U.S. Attorney’s Office did not disclose the name of the cardiologist.

Further, the False Claims Act and Stark Act require that physicians be paid salaries that are no more than fair market value and may not include compensation for referrals of patients. Aria self-reported the cardiac thoracic surgeon contract to the Department of Justice based on a concern that his $1.4 million annual compensation was outside fair market value. The U.S. Attorney did not disclose the surgeon’s name.

Regarding the trademark purchase, Aria paid $3.5 million for the right to use the trademark in perpetuity. Aria’s own internal investigation, conducted in 2014, found that the trademark payment was inflated above fair market value based on an independent valuation.

“Patients have a right to medical treatment that is ethical and necessary and not influenced by a physician’s strategy to increase his compensation,” said U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger. “In this case, Aria recognized a problem, reported it to the government and voluntarily made internal changes to its operations.”

Last October, Aria Health and Jefferson jointly announced that they had begun formal discussions to merge the two healthcare organizations with the goal of completing the merger this spring. ••