UMDNJ's Federal Monitor Charges Cardiology Kick-Back Scheme Reached Into All Levels of Administration

The leadership of the University of Medicine and Dentistry of New Jersey (UMDNJ) seems to just keep digging a bigger hole for itself. As we have discussed previously, The university now is operating under a federal deferred prosecution agreement with the supervision of a federal monitor (see most recent posts here, here, here, here and here.) We had previously discussed allegations that UMDNJ had offered no-bid contracts, at times requiring no work, to the politically connected; had paid for lobbyists and made political contributions, even though UMDNJ is a state institution; and seemed to be run by political bosses rather than health care professionals. (See posts here, and here, with links to previous posts.) The most recent allegations, which surfaced last week (see post here) were that the University were paying community cardiologists as clinical faculty as a reward for them referring patients to the UMDNJ cardiac surgery programs, but not as payment for any substantial teaching duties.

Now the Newark Star-Ledger has just reported that the federal monitor assigned to UMDNJ also averred that "UMDNJ had devised an illegal scheme to pay local cardiologists in private practice for hundreds of patient referrals." But worse,

The report documented nearly $36 million in illegal Medicare and Medicaid payments for procedures on hundreds of patients, in ex change for payments of $5.7 million to physicians since 2002 in ex change for sending their heart patients to UMDNJ's University Hospital.

'Unfortunately, this scheme reached well into all levels of the hospital and University Central Administration, who were complicit first in forming and expediting this illegal plan, and later in covering it up,' said Stern in his report, who said the illegal activity 'persists to this day.'

Noting that administrators were aware of the kickback allegations -- settling a lawsuit for $2.2 million by a whistleblower who claimed he was fired for protesting the illegal scheme -- Stern said UMDNJ violated the terms of the deferred prosecution agreement by not only failing to alert his office to the existence of the whistleblower, but by failing to provide relevant documents and information related to the allegations in the lawsuit.

And still worse,

U.S. Attorney Christopher Christie has begun an investigation into charges that the University of Medicine and Dentistry of New Jersey paid nearly $6 million in illegal kickbacks to 18 cardiologists in ex change for patient referrals.

At the same time, Christie said he was particularly disturbed by findings that UMDNJ had violated a deferred prosecution agreement with the government by failing to cooperate with the university's federal monitor on a five-month inquiry into the matter.

And even worse, the New York Times reported that the federal monitor "accused the university’s interim president, Bruce C. Vladeck, who was appointed by Gov. Jon S. Corzine in the spring to restore credibility, of 'trying to refute, rebut and bury' information about violations of anti-kickback laws. It was the first time that the federal monitor, Herbert J. Stern, had directly criticized Mr. Vladeck."

The hits they just keep on comin' for UMDNJ. The most distressing aspect of the current allegations is that they involve activities that continued after the University agreed to a deferred prosecution agreement, and after the leadership of the University was totally revamped.

If the UMDNJ case do not demonstrate the crying need for transparent, representative, accountable, and ethical leadership of health care organizations, I don't know what case does.