UPMC Will Pay $8.5M to Settle False Claims Allegations; Separate 'Sordid Vendetta' Defamation Suit Continues

The settlement is the latest development in an ongoing, bitter feud between former colleagues who've traded accusations of drug abuse and improper romantic relationships.

UPMC will pay the federal government $8.5 million to settle whistleblower false claims allegations, ending one chapter in a bitter, years-long feud between former physician-colleagues at the prestigious health system that reads like a script taken from "General Hospital."

UPMC, University of Pittsburgh Physicians, and James L Luketich, MD, the renowned chair of the Department of Cardiothoracic surgeon at the sprawling, Pittsburgh-based health system, agreed to the fine to settle allegations that Luketich "regularly performed as many as three, complex surgical procedures at the same time, failed to participate in all of the ‘key and critical' portions of his surgeries, and forced his patients to endure hours of medically unnecessary anesthesia time, as he moved between operating rooms and attended to other patients or matters," the U.S. Justice Department says in a media release.

The DOJ complaint stated that "those practices amounted to violations of the statutes and regulations which prohibit ‘teaching physicians' (like Dr. Luketich) from billing the United States for ‘concurrent surgeries,' were well known to UPMC leadership, and increased the risk of surgical complications to patients."

"The Settlement Agreement provides that it is neither an admission of liability by the Defendants nor a concession by the United States that its claims are not well founded," DOJ says. "Instead, in order to avoid delay and the expense of protracted litigation, and in consideration of the promises and obligations of the Settlement Agreement, the parties agreed to resolve the case."

Luketich's attorney, Efrem M. Grail, says his client is "pleased this settlement puts an end to the Government's case."

"Medical schools and their hospitals have sought clarity about the billing regulation for teaching physicians at issue here for years, and the United States has never provided it," Grail says. "This settlement provides a mechanism we hope will lead to authoritative guidance so that universally respected surgeons like Dr. Luketich can return their focus to training young doctors to save lives without having to put up with baseless claims of fraud."

UPMC issued a statement acknowledging the "false claims action challenging UPMC's billing for some of Dr. Luketich's most complicated, team-based surgical procedures."

"At issue was compliance with the CMS's ‘Teaching Physician Regulation' and related billing guidance as well as with UPMC's internal surgical policies," the statement read. "Among other terms, the parties agreed that UPMC could seek clarity from CMS regarding how it should bill for such surgeries. While UPMC continues to believe Dr. Luketich's surgical practice complies with CMS's requirements, it has agreed to pay $8.5 million to the government to avoid the distraction and expense of further litigation. UPMC has also reserved the right to challenge the relator's share of the settlement."

'Sordid Vendetta'

This is where things turn nasty.

While the case with the government has been settled, Luketich is the plaintiff in a separate but related and ongoing defamation suit alleging that the whistleblowers -- two former colleagues – illegally recorded a February 2018 private medical consultation that Luketich had with his personal physician in a UPMC Presybterian Shadyside surgical observation room, during which they discussed Luketich's Suboxone prescription.

The whistleblowers – identified as Jonathan D'Cunha, MD, now chair of cardiothoracic surgery at Mayo Clinic, Arizona, and Lara Schaheen, MD, a UPMC resident at the time – allegedly recorded the conversation and circulated a transcript of it to peers, rival health systems, government officials and hospital administrators, the suit claims.

Documents filed by Luketich in an Allegheny County court allege that his two former colleagues "were acting on a deep-seated and visceral animus" against Luketich that began in 2017 after he confronted them about their alleged romantic relationship and the alleged favorably treatment that D'Cunda showed to Schaheen.

"Their personal interactions, as described by many with whom they worked, were far outside the norms of what would be expected of professional colleagues," Luketich's filing states. "For example, Dr. Schaheen drew circles on Dr. D’Cunha's wrist in the operating room, and Dr. Schaheen received text messages from Dr. D'Cunha while she was in the operating room asking her to 'come to the office and cuddle with [him].'"

The defamation suit alleges that D'Cunha and Schaheen, as part of a "sordid vendetta, sought to use the illegal recordings to portray Luketich "as a drug abuser and as an impaired physician."

Luketich wants an Allegheny County Court judge to throw out recordings, which he says were illegally obtained and which are being used as evidence in a separate suit filed against him by a former patient.

'Dr. D'Cunha's Brave Decision'

D'Cunha's attorneys offer a different picture.

They claim D'Cunha blew the whistle because Luketich's longstanding practice of conducting and overseeing multiple surgeries at once was a violation of Medicare rules, and endangered patients. D'Cunha alleged that UPMC knew about it since 2015 but took no action against the renowned surgeon.

"The Department of Justice's complaint strongly refuted any suggestion that this lawsuit was merely a billing dispute involving confusing government regulations," D'Cunha's attorneys at Phillips & Cohen LLP say in a media release. "It alleged that the conduct did not involve merely technical violations of billing requirements or internal policies. Instead, the government alleged that Luketich's surgical practices defied the standard of care, abused patients' trust, inflated anesthesia time, increased the risk of complications to patients, and – on at least several occasions – resulted in serious harm to patients."

Claire Sylvia, D'Cunha's attorney and Phillips & Cohen says "Dr. D'Cunha's brave decision to step forward despite the personal costs he has endured in order to ensure that this conduct was addressed is exactly the kind of conduct the False Claims Act was intended to encourage and reward."

Her colleague, Jeffrey Dickstein, says the settlement "finally brings meaningful oversight of Dr. Luketich and UPMC."

"Patients deserve more of their surgeon's attention; the government demands it. Now they'll get it," Dickstein says.

The defamation suit and related countersuits are being heard in the Court of Common Please of Allegheny County Pennsylvania.