Officials with the Baylor St. Luke’s Medical Center, Baylor College of Medicine and Surgical Associates of Texas P.A.—three Texas Medical Center entities—have jointly agreed to a $15 million settlement related to allegations they billed for concurrent heart surgeries, officials with the U.S. Department of Justice announced June 24.

What happened

In a news release, U.S. Attorney Alamdar Hamdani said the concurrent billing was in violation of Medicare teaching physician and informed consent regulations. A federal investigation spurred by a whistleblower complaint has been ongoing since Aug. 7, 2019, looking at alleged violations involving three heart surgeons—Dr. Joseph Lamelas, Dr. Joseph Coselli and Dr. David Ott—between June 3, 2013, and Dec. 21, 2020.

Coselli and Lamelas were employed by Baylor College of Medicine as teaching physicians at a teaching hospital at Baylor St. Luke's Medical Center, according to the DOJ release. Ott was a cardiothoracic surgeon employed by Surgical Associates of Texas who also performed surgeries at Baylor St. Luke's.

The details

The whistleblower alleged the three surgeons "engaged in a regular practice of running two operating rooms at once and delegating key aspects of extremely complicated and risky heart surgeries to unqualified medical residents," according to the release, which specifically referenced coronary artery bypass grafts, valve repairs and aortic repair procedures.

The surgeons allegedly violated Medicare regulations over when teaching physicians can leave the operating room. Among the whistleblower allegations were claims that:
  • The surgeons "often ran two operating rooms at once."
  • The surgeons did not attend surgical “time-outs,” described in the complaint as an important break period allowing teams to identify risks to prevent surgical errors.
  • The surgeons would enter second or third operations without designating a backup surgeon.
  • The surgeons hid violations by falsely attesting on medical records they were physically present for the “entire” operation.
DOJ officials said in the release the claims resolved by the settlement are allegations only, and there has been no determination of liability. Statements from Baylor St. Luke's, Baylor College of Medicine and Surgical Associates of Texas have disputed the DOJ's allegations and emphasized the settlement did not involve any admission of liability.

DOJ officials said the $15 million settlement is the largest settlement to date involving concurrent surgeries. Under the false claims act, the whistleblower will receive $3,075,000.

What they're saying

In a statement, Hamdani said the settlement reaffirms the importance of the Medicare requirements.

"Patients entrusted these surgeons with their lives—submitting to operations where one missed cut is the difference between life and death," Hamdani said. "Allegedly, the patients were unaware their doctor was leaving for another operating room."

Douglas Williams, special agent in charge with the FBI, said the surgeons "gambled with patients' care, ... compromising quality of care over quantity, and then falsely billed Medicare for reimbursement of services they improperly delegated."

As part of the settlement agreement, Baylor disputed that any violations of federal law or regulation occurred, said Robert Corrigan Jr., general counsel for Baylor College of Medicine. No patients were harmed, he said.

"The college decided to amicably resolve the dispute prior to a trial on the merits after considering the cost and expense incurred by Baylor to date, and anticipated future costs and expenses, including attorneys’ fees,” Corrigan said in a statement.

Officials with Baylor St. Luke's also emphasized the DOJ claims were allegations, and the settlement was not an admission of liability.

"Baylor St. Luke’s Medical Center has reached an agreement with the Department of Justice to resolve a documentation and billing matter involving compliance and billing requirements set forth by the Centers for Medicare and Medicaid Services," a statement from Baylor St. Luke's reads. "The DOJ claims are strictly allegations, and the settlement by Baylor St. Luke’s is not an admission of liability. Baylor St. Luke’s remains committed to complying with all CMS regulations."

A statement from Surgical Associates of Texas also disputed the DOJ's allegations and said the case was settled to avoid the legal costs of the lawsuit.

"Surgical Associates of Texas is a surgical practice formerly affiliated with a surgeon involved in a recent settlement agreement entered into with the Department of Justice," the statement reads. "The settlement agreement relates to documentation and billing requirements set forth by the Centers for Medicare and Medicaid Services, and the DOJ’s allegations did not involve patient harm. SAT disputes the DOJ’s allegations and does not admit any liability related to the settlement agreement. The case was settled to avoid the costs related to a lengthy legal dispute."