Redding Docs to Pay Millions to Settle False Claims Act Lawsuit

19 Corporate Crime Reporter 45(3), November 15, 2005

Four California doctors will pay $32.5 million to settle allegations that they performed unnecessary heart surgeries at the Redding Medical Center in Redding, California.

The settlement requires the doctors – Fidel Realyvasquez, Kent Brusett, and Ricardo Javier Moreno-Cabral – to provide their insurance carrier with a consent to settle for their insurance policy limits, which total $24 million.

Realyvasquez, a old heart surgeon, and Dr. Chae Moon, a cardiologist, will each pay $1.4 million in the settlement.
Brusett, a heart surgeon, will pay $250,000 over 10 years.

Moon and Realyvasquez each agreed to never perform any cardiology procedures or surgeries paid for by the federal government.

Tenet Healthcare Corporation, which owned Redding Medical Center earlier this year agreed to pay $54 million to settle allegations that the company defrauded the government through the unnecessary heart surgeries performed at the hospital.

Today, Tenet also agreed to pay an additional $5.5 million to complete the terms of the original settlement.
Father John Corapi, a Catholic priest, had coronary artery bypass surgery recommended to him at Redding Medical Center, but he didn't believe he needed the surgery.

After conferring with other physicians and meeting with RMC hospital officials, he and his friend, Joseph Zerga, filed a False Claims Act lawsuit under seal on November 5, 2002.

Three days later, Dr. Patrick Campbell, a local doctor in Redding, filed his complaint under seal, alleging suspicions about the unnecessary surgeries.

Campbell's complaint was dismissed by the district court but later re-instated by the Ninth Circuit Court of Appeals.

Despite mediation and other attempts to divide the 15-25% statutory reward available to whistle-blowers under the False Claims Act, the whistle-blowers could not determine how to share the award.

Under the terms of the settlement, the whistle-blowers will divide a 15 percent share of the total $62.55 million recovery for the government ($54 million previously from Tenet, plus another $5.5 million from Tenet, $1.4 million each from Realyvasquez and Moon, and $250,000 from Brusett).

Corapi and Zerga will each receive $2,712,281, for a total recovery of $5,424,562. Campbell will receive $4,457,938.

The settlement also requires Tenet to pay $1 million to settle a pending California Insurance Code case filed by Corapi and Zerga.

Of that $1 million settlement, the California Department of Insurance will receive $500,000 and Corapi and Zerga will receive $500,000.

Under the terms of the settlement, the doctors will be given a letter advising that the U.S. Attorney's Office will not initiate criminal charges against the physicians.


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