AZA Aids U.S. in Reaching $15 Million Baylor Heart Surgery Medicare Fraud Settlement  
June 25, 2024

Whistleblower claim leads to record settlement for concurrent surgery fraud 

HOUSTON – Working in concert with the federal government for five years, lawyers at AZA saw their whistleblower client receive $3 million of the $15 million settlement of a lawsuit alleging that Houston surgeons were letting unqualified trainees perform parts of heart surgeries while the surgeons billed for two or three concurrent surgeries. 

The settlement is with Baylor St. Luke’s Medical Center, Baylor College of Medicine and Surgical Associates of Texas P.A. The government said it is the largest settlement on record for Medicare fraud over concurrent surgery claims. 

“In short, the teaching physicians churned through as many cardiac surgeries as possible to generate revenue for Baylor, regulations be damned, and were rewarded with lavish compensation,” said the lawsuit filed by AZA. 

That whistleblower lawsuit filed under the False Claims Act resulted in this government intervention and the June 2024 settlement over allegations of the massive number of false claims made to Medicare from 2013-2020. 

Medicare billing regulations require that a teaching physician must be in the operating room and supervising operations during critical portions of surgeries. Regulations also require adequate informed consent from patients. The lawsuit alleges that procedures were done in violation of these regulations, resulting in a $150 million windfall for the hospital and allowed the surgeons to make compensation up to four times what their colleagues made.  

“Medicare regulations are there to protect the integrity of the government program and to protect patients. Patients have a right to a surgeon’s undivided attention, especially in a procedure as important and complicated as heart surgery,” said AZA co-founder Joe Ahmad. He developed the case with AZA partner Nathan Campbell and Of Counsel David Warden. 

The AZA lawyers worked hand in hand with lawyers at the U.S. Southern District of Texas’ U.S. Attorney’s Office to gather evidence. The press release from the Houston U.S. Attorney is here Texas medical center institutions agree to pay $15M record settlement involving concurrent billing claims for critical surgeries. 

Mr. Campbell said he is pleased the government chose to intervene in this lawsuit and reach this settlement. “Hopefully this result will shed light on these regulations and serve as a strong warning to surgeons and hospitals that the Department of Justice will take these rules and whistleblower suits seriously,” he said. 

The False Claims Act allows a whistleblower to file a lawsuit on behalf of the government over fraud. The government can then choose whether to intervene and investigate 

“We took this case when we saw it concerned not only double and triple billing to Medicare but also something as serious as heart surgeries,” said Mr. Warden. The heart surgeries in question included coronary artery bypass grafts, valve repairs and aortic repair procedures. 

The case is in federal court in Houston titled Morgan et al. v. Baylor St. Luke’s Medical Center et al. case number 4:19-cv-02925. 

AZA, or Ahmad, Zavitsanos & Mensing, is a Houston-based law firm that is home to true courtroom lawyers with a formidable track record in complex commercial litigation, including energy, healthcare, intellectual property and business dispute cases. AZA is recognized by Chambers USA 2024 as among the best in Texas in commercial law and intellectual property; has been listed by Best Lawyers’ Best Law Firms as one of the country’s best commercial litigation firms for 12 years; has been named Litigation Department of the Year by Texas Lawyer three times; and was previously dubbed a Texas Powerhouse law firm by Law360.


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