In a single week, officials at Wheeling Hospital resolved its immediate future as well as a federal case related to a kickback scheme involving physicians at the hospital.
On Wednesday, hospital officials agreed to pay $50 million to resolve claims that R&V Associates Lt., the company that previously managed the hospital, and Ronald Violi, former CEO of the hospital, defrauded Medicare and Medicaid for “tens of millions of dollars” between 2007 and 2020, according to a news release from the U.S. Department of Justice.
Friday morning, officials from the hospital and West Virginia University Health Services announced Wheeling Hospital would become a full member of WVU Health Services through a letter of intent signed by the Diocese of Wheeling-Charleston and WVU Health officials.
Under the terms of the letter, WVU Health will enter into a 50-year long-term lease of Wheeling Hospital and its related facilities, and the hospital will be able to maintain its affiliation with the Catholic church.
WVU Health has managed operations at Wheeling Hospital since June 2019, when hospital officials reported $37 million in losses during the prior two years.
In December 2017, Louis Longo, former executive vice president of Wheeling Hospital, and federal prosecutors filed a whistleblower lawsuit against Pittsburgh-based R&V Associates and Violi.
In that suit, originally filed in federal court in the Western District of Pennsylvania, Longo said Violi fired him in 2015 after he raised concerns with Violi and a hospital board member about the hospital’s practice of overpaying doctors by defrauding Medicare and Medicaid, and Violi’s management style. Longo will receive $10 million of the $50 million settlement, according to the Department of Justice’s news release.
The case was transferred from Pennsylvania to the Northern District of West Virginia in June 2019. The lawsuit alleged that from 2007 to 2020, under the direction and control of its prior management — R&V Associates and Violi — Wheeling Hospital systematically violated the federal Stark Law and Anti-Kickback Statute, according to the U.S. Department of Justice’s news release.
The Stark Law prohibits hospitals from billing Medicare for certain services referred to the hospital by physicians who have financial relationships with the hospital. The Anti-Kickback Statue prohibits an entity from reimbursing people, in this case hospitals and physicians, for referrals of services or items covered by Medicare, Medicaid and other federally-funded programs.
Under the terms of the settlement, U.S. District Judge John Preston Bailey dismissed the case against Wheeling Hospital with prejudice, meaning it is dismissed permanently.
The case against R&V Associates and Violi were dismissed without prejudice, meaning federal prosecutors can still pursue other legal action against them regarding the circumstances described in the now-closed Longo case.