Eastern Kentucky Hospital System and Cardiologist Agree to Collectively Pay More Than $3 Million to Resolve Civil Liability for Improper Healthcare Billings

LEXINGTON, KY – According to the U.S. Attorney's Office, Eastern District of Kentucky: Appalachian Regional Healthcare, Inc. (“ARH”), a hospital system based in eastern Kentucky, and one of its cardiologists have agreed to collectively pay the United States $3,033,861.92 to settle civil allegations that they submitted, or caused the submission of, improper claims to Medicare and Kentucky Medicaid for non-covered services.

The case arises from diagnostic cardiac catheterizations and associated services performed or ordered by Padubidri Chandrashekar, M.D., a cardiologist who had admission privileges at ARH.  Diagnostic catheterizations are minimally-invasive imaging procedures that can be used to evaluate heart problems.  During the procedure, a thin, hollow tube is introduced into a patient’s blood vessel and then advanced to the heart, so that pressure and blood flow can be measured in the heart’s chambers or dye can be injected to allow x-ray visualization of the heart.  Medicare and Kentucky Medicaid reimburse medical providers for services and procedures, such as diagnostic catheterizations, only when medically reasonable and necessary.  Medicare and Kentucky Medicaid require that the patient’s records adequately document the medical need for the service provided.

The United States alleged that Dr. Chandrashekar caused ARH to bill Medicare and Kentucky Medicaid for diagnostic catheterizations performed at ARH Hazard that did not have sufficient documentation to support the medical necessity of the procedures.  The United States also alleged improper billing in connection with services performed prior to the unnecessary catheterizations.  Specifically, the United States contended that Dr. Chandrashekar and his practice, Mountain Heart Center, billed for medically unnecessary appointments in the days preceding patients’ diagnostic catheterizations and admitted patients to ARH Whitesburg in advance of their diagnostic catheterizations.  The United States contended that ARH then submitted false claims to Medicare and Medicaid for those admissions, because the admissions did not meet Medicare and Medicaid’s requirements for severity of illness or intensity of services.  Finally, the United States alleged that Dr. Chandrashekar caused the submission of improper claims for ambulance transfers for patients unnecessarily admitted to ARH Whitesburg who needed transport to their catheterizations at ARH Hazard.

In its settlement agreement with the United States, ARH agreed to pay the United States $2,884,046.50 to resolve its civil liability for improper billings, including its liability under the federal False Claims Act.  In a separate settlement agreement, Mountain Heart Center and Dr. Chandrashekar agreed to pay $149,815.42 to resolve their False Claims Act liability.

This matter arose from ARH’s self-disclosure of false or non-covered claims.  Because ARH self-reported the conduct to the government, it was able to resolve its False Claims Act liability for only 1.5 times the amount of monetary loss caused by its false claims.  The False Claims Act establishes liability for three times the amount of loss suffered by the government.

Healthcare providers may voluntarily disclose self-discovered evidence of fraud to the U.S. Department of Health & Human Services Office of Inspector General.  More information about how to self-disclose misconduct under the Provider Self-Disclosure Protocol is available at The United States also encourages anyone with information about potential fraud, abuse, or mismanagement of Medicare or Medicaid funds to call the U.S. Department of Health and Human Services’ hotline at 800-HHS-TIPS (800-447-8477). 

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, the Kentucky Attorney General’s Office of Medicaid Fraud and Abuse Control, and the Affirmative Civil Enforcement section of the U.S. Attorney’s Office.  Assistant United States Attorneys Meghan Stubblebine, Benjamin Long, and Jennifer Williams represented the United States.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

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