A “whistle-blower” lawsuit filed in federal court alleges the owner of Mesa General Hospital and Mountain Vista Medical Center performed unnecessary medical procedures and illegally compensated doctors for patient referrals.
The sealed suit was filed against Iasis Healthcare in 2005 in the U.S. District Court of Arizona, and was recently unsealed. Jerre Frazier, a former vice president for ethics and compliance for Iasis Healthcare, filed the suit on behalf of the federal government.
The lawsuit alleges that, starting in 1999, Iasis:
• Received millions of dollars from Medicare, Medicaid and other federal health programs for referrals made by physicians with whom it had “improper financial arrangements for outpatient and inpatient services.”
• Received millions of dollars from Medicare, Medicaid and other federal health programs for “medically unnecessary procedures performed by various physicians with whom (it) has improper financial relationships.” The sole physician named in the suit from Arizona is Dr. Robert Siegel at Mesa General Hospital and St. Luke’s Medical Center in Phoenix.
Tomi Galin, Iasis Healthcare’s corporate spokeswoman, said the company has not yet seen the complaint, but the federal government decided in May that it is not going to intervene. “The matter is now a private lawsuit between Iasis and its former employee,” she said. “Iasis intends to vigorously defend itself against the former employee’s allegations and bring this matter to its ultimate resolution.”
The suit alleges that many “medically unnecessary” procedures, including interventional cardiology, radiology and other procedures, have been performed at Mesa General Hospital and St. Luke’s Hospital. “Our client was in a position to know exactly what Iasis Healthcare was doing to increase its profits,” said Colette Matzzie, an attorney with Phillips & Cohen LLC, which is representing Frazier.