Sanford Settles Bone Screw Suit for $20.25M; Doctor Still on Lawsuit Hook?

Got $20 million? Then you, too, can get the federal government off your back.

Sanford Health is paying the federal government $20,250,000 to settle the huge lawsuit whistleblower surgeons filed against it for defrauding Medicare, Medicaid, Tricare, and the VA by ignoring warnings that neurosurgeon/entrepreneur Wilson Asfora was profiting from unnecessary spinal surgery to implant his bone screws. Here’s the settlement filed yesterday in the United States District Court of South Dakota:

Sanford admits no liability. The federal government makes no “concession… that its claims are not well founded.” The whistleblowers get $3.4 million out of Sanford’s payment to Uncle Sam.

Sanford also promises to do the job it should have been doing anyway and not defraud the government with kickback schemes for device-peddling docs ordering fishy procedures:

Contemporaneous with the civil settlement, Sanford entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. The CIA requires, among other things, that Sanford maintain a compliance program, implement a risk assessment program, and hire an Independent Review Organization to review Medicare and Medicaid claims at Sanford Medical Center. It also increases individual accountability by requiring compliance-related certifications from Sanford Medical Center’s board of directors and key executives.

“More than six years ago the Department of Health and Human Services Office of the Inspector General warned in a fraud alert that PODs were inherently suspect under the Anti-Kickback Statute. Unfortunately, these distributors remain questionable,” said Curt L. Muller, Special Agent in Charge, Office of Inspector General at the U.S. Department of Health and Human Services (HHS-OIG). “Patients in government healthcare programs rightly expect that surgeries are medically indicated, not performed to increase provider profits” [U.S. Attorney’s Office, District of South Dakota, press release, 2019.10.28].

Dr. Asfora did not sign this settlement. It would thus appear that the Department of Justice can continue to fry Asfora’s bacon in court… and the settlement obliges Sanford to help:

13. Sanford agrees to cooperate fully, actively, and truthfully with the United States in any investigation and litigation in connection with or arising out of the Civil Action and any proceedings related to such Civil Action. Such cooperation shall include, but not be limited to, the following:

a. Upon request by the United States with reasonable notice, producing to the United States and not at the expense of the United States, complete and unredacted copies of all requested non-privileged documents, records, and other evidence in Sanford’s possession, custody, or control relating to Asfora, MDLLC, or Sicage, LLC (Sicage), including, but not limited to, reports, memoranda of interviews, and records concerning any investigation that Sanford has undertaken, or that has been performed by another on Sanford’s behalf, of any actions or arrangements by or involving Asfora, MDLLC, or Sicage that may implicate or involve the AKS and/or FCA;

b. Upon request by the United States with reasonable notice, making current Sanford directors, officers, and employees available for interviews, consistent with the rights and privileges of such individuals, by counsel for the United States and/or their investigative agents, not at the expense of the United States, at a mutually agreed-upon location;

c. Upon request by the United States with reasonable notice, using best efforts to (i) assist in locating former Sanford directors, officers, and employees identified by attorneys and/or investigative agents of the United States, and (ii) to make any such former Sanford directors, officers, and employees available for interviews, consistent with the rights and privileges of such individuals, by counsel for the United States and/or their investigative agents, not at the expense of the United States, at a mutually agreed-upon location; and

d. Upon request by the United States with reasonable notice, making current Sanford directors, officers, and employees available, and using best efforts to make former Sanford directors, officers, and employees available, to testify, consistent with the rights and privileges of such individuals, fully, truthfully, and under oath, without falsely implicating any person or withholding any information, at depositions, at trial, and at any other legal proceedings [Plaintiffs United States of America, C. Dustin Bechtold, and Bryan Wellman and Defendants Sanford Health and Sanford Clinic, Notice of Settlement, Case #16-4115-LLP, 2019.10.28].

Dr. Asfora is disappointed with Sanford’s settlement:

I understand the news came out today of Sanford’s settlement with the Government. I want to make my position clear. I did not perform any unnecessary surgeries and I did not do any surgeries for the purpose of profiting from using medical devices I invented. I stand by my work as a physician and made every single medical decision based solely on my judgment as to what was the best for my patient, not myself. I am disappointed that after originally accurately identifying the relators’ and the Government’s accusations as “bogus,” Sanford made business decisions that led it to fire me and pay my accusers over $20 million, but, sadly, for some business is just business [Dr. Wilson Asfora, in Angela Kennecke, “Sanford to Pay $20 Million in Kickback Scheme,” KELO-TV, 2019.10.28].

Dr. Asfora didn’t mind Sanford’s business-like approach back when Sanford paid him for surgery and his medical devices.

Sanford says Asfora’s business practices were naughty, but they continue to rebut any charge that he practiced bad medicine:

This matter relates to our employment of Dr. Asfora and his business practices. As you know, Sanford took these allegations seriously, including suspending the use and purchase of Dr. Asfora’s devices. We then severed our relationship with him, based solely on his business practices –not his medical care. We are confident that Sanford acted appropriately and in good faith in the conduct of this matter, and we believe collaborating with the federal government on this settlement was in the best interest of our patients.

We continue to stand behind the care that Dr. Asfora provided to his patients, and we fully support our providers in determining what is best for their patients. We also want to reiterateour support for providers as they bring innovative interventions to patients and communities [Matt Hocks, Chief Operating Officer, Sanford Health, e-mail to staff, linked in Kennecke, 2019.10.28].

Sanford also tells staff in that memo that $20.25 million is less than “the unnecessary costs and operational disruption that would have persisted for multiple years had we not settled, not to mention potential harm to our brand and reputation.”