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Arkansas Heart Hospital Target of Whistleblower Suit

5 min read

A 2019 whistleblower lawsuit filed by a former chief financial officer of Arkansas Heart Hospital accuses the Little Rock cardiac center and some of its surgeons of Medicare fraud.

The former CFO, Brad Reach, worked for Arkansas Heart Hospital for about eight months until he was terminated in March 2019. The following October he filed suit on behalf of the federal government, alleging potentially millions of dollars in Medicare fraud

The case was sealed while the U.S. Attorney’s Office for the Eastern District of Arkansas weighed joining the case and unsealed when the federal prosecutors declined to intervene in 2022. Arkansas Business recently found the complaint and its allegations, which the defendants, through their attorneys, vehemently deny.

Reach alleged two fraudulent schemes:

That the hospital, Dr. Mehmet Cilingiroglu and other unknown providers falsified patient charts and documented conditions that didn’t exist to receive higher payments from Medicare for procedures performed in the structural heart program, which treats patients with heart diseases;

That Medicare was billed for services never provided. Reach’s suit claims that Drs. C.D. Williams or Michael Nolen, or both, billed as assisting each other during surgeries when they didn’t or were only at the procedures briefly, according to the court filings in federal court in Little Rock.

Not true, the defendants’ attorneys say.

“We’ve done extensive interviews of people and review of records,” said attorney Gregory Hopkins of Hopkins Caststeel of Little Rock, which is representing the hospital and Nolen. “We see no evidence that there was anything improper in any of the billing practices. So they’re denied, and they will be contested vigorously.”

Cilingiroglu’s attorney, Jeffery Wankum of North Little Rock, declined to comment on the case but denied the allegations in court filings. One of Williams’ attorneys, Jack Selden of Bradley Arant Boult Cummings of Birmingham, Alabama, also denied the allegations in court filings.

One of Reach’s attorneys, Russell Winburn of Taylor King Law of Springdale, also said he couldn’t comment on the case.

The U.S. Attorney’s Office said in a July 2022 filing that the decision not to intervene in the case “is multi-tiered and complicated.”

A trial date hasn’t been set.

‘Years of Experience’

Reach, a bachelor’s and master’s graduate of Arkansas State University in Jonesboro, joined Arkansas Heart Hospital in July 2018. He had been the CFO at Illinois Valley Health Corp. in Peru, Illinois. “Brad not only brings years of hospital financial experience to the table, but also an energetic attitude towards all facets of healthcare management,” President and COO Drew Jackson said in a news release at the time.

Reach’s annual salary was $225,000.

The first documented signs of trouble appeared to have started in January 2019, when the hospital’s financial council reviewed open-heart surgeries and the structural heart program for fiscal years 2017 and 2018 and the first fiscal quarter of 2019, which began Oct. 1, 2018.

Reach learned the structural heart program operated at a loss of about $1 million in 2018 and was on pace to lose $2.5 million in 2019. Reach met with doctors in the program and told them that if there wasn’t an immediate turnaround, the hospital would start limiting procedures.

Reach also met weekly with Cilingiroglu and other doctors about the program.

Reach alleged that Cilingiroglu met with a vendor account manager about what documentation was needed to prompt the higher Medicare rates. The vendor, Reach alleged, said that reporting additional illnesses, even if the patient didn’t have them, would result in higher Medicare payments.

“The physicians put this plan into action,” Reach said in the lawsuit.

Reach said that Medicare paid the hospital an estimated $850,000 in services for physicians treating or charting nonexistent illnesses, according to one of his court filings. “Though [Cilingiroglu’s] intentions in saving the Structural Heart Program may have been noble, he defrauded the federal government to accomplish his task,” the fling said.

Hopkins, the Arkansas Heart Hospital’s attorney, said that the hospital hired extra attorneys to do an “extensive internal investigation of the allegations” and found no wrongdoing.

Reach also said he discovered other wrongdoing involving Drs. Nolen and Williams.

Reach alleged that Williams filed a claim as an assistant surgeon for a Medicare patient who had bypass surgery on Jan. 12, 2019. But Reach said Williams could not have assisted in the surgery because he was prohibited from participating in surgical procedures at the hospital between Jan. 2 and Feb. 21, 2019, because of a medical issue.

Reach said he found that during that nearly seven-week period, Williams was listed as “first assist” on seven bypass surgeries for Medicare patients in which Nolen was the primary physician and in which there was no explanation or note of Williams’ aid, Reach alleged.

“Upon information and belief Nolen permitted Williams to fraudulently sign off as a ‘First Assist’ on the surgeries he performed so that Williams would return the favor,” Reach said.

In court filings, the hospital, Williams and Nolen denied the allegations.

“We’ve investigated that allegation and determined that there’s no merit to it,” said Hopkins, the attorney for the hospital and Nolen. “There was never a time when Dr. Williams was prevented or prohibited from practicing at the hospital. … We’re puzzled by that allegation because there seems to be absolutely no merit to it.”

Williams also said in a filing that the allegation that he was prohibited by the hospital from performing surgeries is “frivolous and false.”

In the middle of March 2019, Reach said, he went to the hospital’s chief clinical officer and said that the hospital could lose its Medicare reimbursement and place the hospital’s Centers for Medicare & Medicaid Services’ license in jeopardy as a result of the alleged Medicare fraud.

Reach said that based on the evidence he uncovered, he estimates that Nolen and Williams perform about 500 open heart procedures annually and about half of those “were fraudulently billed.”

According to his calculations, Williams or Nolen, or both, have allegedly fraudulently billed Medicare for $13.5 million over 10 years.

Hopkins, the attorney for the hospital and Nolen, said that from the hospital’s standpoint, “it’s absolutely false.”

“We don’t believe there was anything they did that was improper, that the so-called first assist procedures are consistent with all of the appropriate medical guidelines and requirements for submitting those to CMS for reimbursement,” he said. “We don’t believe there was an overbilling on anything, improper billing on anything.”

On March 26, 2019, Reach was fired. Reach said that he thinks he was terminated for his efforts to stop the alleged fraud. Hopkins said Reach was terminated for “poor performance.”

On Oct. 15, 2019, he filed the lawsuit on behalf of the federal government for alleged violations of the False Claims Act.

“We thought we were done with him, and then all of a sudden, this lawsuit pops up,” Hopkins said.

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