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Alleged Doctor Kickbacks Cost Cooper $12.6M

A Haddonfield doctor’s whistleblower lawsuit sparked an investigation that ended in a multimillion dollar settlement payment by Cooper Health System.

HADDONFIELD-HADDON TOWNSHIP, NJ -- Cooper Health System will pay $12.6 million to settle allegations the Camden hospital engaged in kickbacks to doctors as it built its cardiology program, state and federal officials said Thursday.

Cooper agreed to pay the federal government $10.2 million and the state $2.3 million in the joint settlement, plus attorney’s fees of $430,000 to a whistleblower, Haddonfield cardiologist Dr. Nicholas DePace. The hospital also already implemented, and agreed to maintain, corporate reforms for accountability, training and other aspects of compliance.

The settlement stems from a joint federal-state investigation into the financial ties between the Cooper Heart Institute in Camden, the Cooper Heart Institute Advisory Board and physicians who served on the advisory board. Investigators allege that doctors who served on the advisory board were seemingly paid for their advice, but actually were paid to refer patients to the Cooper Heart Institute.

The physicians were paid $18,000 annually to attend four meetings in a given year, investigators found. Federal and state officials say the payments were meant to encourage the doctors to refer patients to Cooper.

Cooper then sought and received reimbursements from Medicare and Medicaid to treat the inappropriately referred patients, in violation of state and federal laws, investigators charged.

“Payments to outside physicians by hospitals require heightened scrutiny because those payments may be improper if they are based on patient referrals,” said U.S. Attorney Paul Fishman. “Such kickback arrangements interfere with the physician-patient relationship, and can lead to problems of overutilization and increased costs. Federal health care participants, such as Cooper, who run afoul of the prohibitions against kickbacks must be held responsible.”

Cardiologist Dr. Nicholas DePace, of Haddonfield, was recruited to take part in the arrangement, but instead filed a whistleblower suit. Cooper agreed to pay $430,000 for DePace’s legal fees in the case. DePace will receive $2.3 million from the settlement as well—$1.95 million from the federal government and $442,890 from the state.

The allegedly improper payments occurred from October 2004 through December 2010, according to the settlement papers (click on the PDF, above, to view.)

Agreeing to the settlement isn’t an admission of liability from Cooper, the settlement states.

"After more than three years of extended discussions with government lawyers, we decided, in the best interests of Cooper, to settle our dispute without the admission of wrongdoing to avoid the burdens and uncertainties of a protracted litigation," John P. Sheridan Jr., president and CEO of Cooper University Hospital, said in a statement. "This allows us to focus our full energies on serving our community."

Cooper sent an email to its employees Thursday about settlement, echoing Sheridan's statement. The email, from Sheridan, also stated: "It is important to note that there is no contention that this program led to any unnecessary or inappropriate services at any time. Our quality of care has never been in question."

(Click the PDF, above, to read the email to the Cooper staff.)

"Cooper has taken responsibility for its past misconduct," John Hoffman, executive assistant New Jersey attorney general, said in a statement. "We commend Cooper for implementing substantial internal reforms and accountability measures designed to address the government's concerns and avoid any future transgressions."

Cooper has undergone aggressive expansion in recent years. In June 2004, hospital leadership announced plans for a $220 million expansion to its campus, which added a 10-floor “patient care pavilion” to the existing hospital. Cooper sought to become a regional health center, and now includes the hospital, the Cooper Medical School of Rowan University, a clinical research building and a cancer institute.

, chairs the board of trustees for Cooper Health System and Cooper University Hospital.

This story was updated at 10:10 p.m., Jan. 24 to include the statements from Cooper Hospital. 

Reality Check Please! January 25, 2013 at 05:41 PM
The Poorest Cities receive the most Federal & State financial aide. Camden, I believe recently received over 165 Million in just state aide, so my question is where did the money go to? Why are only the city tax-exempt companies showing growth while the rest of the city and their services are sinking. Why is there no investigation into the core of the problems instead of throwing even more tax dollars and power into the hands of the ones who are the actual cause in the first place?
Big Daddy 1 January 25, 2013 at 05:46 PM
Democratic governments around here all do their insurance type business with Conner Strong Buckelew (which is Norcross). Hearing more stories that companies wishing to do business with Cooper also have to use a Norcross insurance business.
Mel January 25, 2013 at 05:52 PM
BD1: Please use the FBI tipline to report these.
Reality Check Please! January 25, 2013 at 05:54 PM
Cooper's CEO George Norcross & Kickbacks Story http://swampwatch.com/2012/04/02/the-drpa-report-and-the-norcross-question/
Big Daddy 1 January 25, 2013 at 05:59 PM
I have reported crimes like these to the FBI a few times. They never call back. And the US attorneys won't do anything unless the FBI tells them to. Why do you think he gets away with this for decades? Just like FUMO. He was covicted 30 years prior, but a corrupt judge overturned it. His downfall was trying to extort Verizon.
Darren Gladden January 25, 2013 at 06:14 PM
Thanks for the check ...........No if you play along with them they will make sure u get one .........SMH .......
Darren Gladden January 25, 2013 at 06:15 PM
BUT how can someone believe u words when u hide behind a fake name . come out and state your NAME , Remember that the American way
@xxLouA January 25, 2013 at 06:39 PM
phew!!!!! should all march to DC....and start from there....
@xxLouA January 25, 2013 at 07:20 PM
some people cry all the time and here it seems to flow all the time. I had a relative who went to Rothman for knee replacement (both) not at same time. she had wrong type put in first time and now she is up to 4 ops on same knee. They do make mistakes but how many times would you allow them to try again. On the other hand I been going to Cooper for sometime now....they saved my life at least 3 times, open heart surgery and so on.. Not to go into details. so I don't have any complaints. the nurses there always gave 110% and more Maybe those people are what you say, but the whistleman made out like a bandit. Good luck to all hagd
Sam I Am January 26, 2013 at 06:07 AM
Medicine in 2013 is a competitive BUSINESS. How many billboards tv commercials and newspaper adds do you see or hear or read daily? How many local hospitals have built 100 million dollar additions to attract patients to their locations? If this was a business selling insurance nobody would think too much of it, but because its predominantly tax payer supported anger at this is expected. Are we being hypocritical when as a nation we push back against the idea of government run healthcare then complain when hospitals try to make a buck? Afterall, Cooper supplies health care to people nobody else wants to care for and they do it pretty well.
Reality Check Please! January 26, 2013 at 01:55 PM
Sam I Am: As stated in all the TV commercials and newspapers ads, the reasons why people should chose Cooper are based on the experience, skill and knowledge of the healthcare providers. So why is their own CEO supporting the Camden County Metro Police Plan that replaces the entire Camden Police Force consisting of the most knowledgeable, skilled and experienced law enforcement officers in Camden? It doesn't make sense. These are qualities you can't replace. Healthcare has never been a more competitive business and has faced more challenges to be successful. The core of any successful business lies in the quality of the services AND the safety of it's environment. Having the CEO of Cooper support a plan that replaces the QUALITY of the Camden Police Force for quantity of poor quality officers is not the answer. The people are being sold a cost-effective plan that takes the budget for the Camden police force from 29 Million in 2012 to 65 MILLION! The NJ taxpayers are going to be OUTRAGED when they realize they have been taken to the cleaners to pay for this political plan. This plan alone will make the city even more dangerous causing people who want to go to Cooper deciding to go to another place they feel is more safe. Cooper has an excellent healthcare team, the Camden police officers know how to protect them and want to protect the streets that NO ONE else wants to! Cooper's CEO is sending a bad message to the public. There is no ad that can correct a negative perception!
Paul J. DiBartolo January 26, 2013 at 02:00 PM
Sam, I would never complain about the service Cooper provides, rather what concerns me is the hundreds of thousands of dollars that is passing hands on the down low. When I turn right on a red light too soon...BOOM...I get nailed. On the other hand, we have these doctors pocketing $4500 four times a year under the guise of providing advice when they were actually being romanced to refer patients to Cooper. Look, I've just seen some bills paid for by my insurance to Cooper and it ain't nothing to sneeze at. So, what are you really trying to say?
Michael Makinson January 26, 2013 at 03:22 PM
The name Norcross appears in the article. What a shocker!!
agent itchy January 26, 2013 at 04:14 PM
so any crime committed at Cooper must a Norcross scheme. a janitor steals a case of pepsi and it's a Norcross scheme. yeah, i get it. you don't like democrats and Norcross is an easy target. how 'bout placing your anger at the doctors who actually committed the crimes Darren Gladden (if that's your real name, lmao)!
Big Daddy 1 January 26, 2013 at 04:27 PM
Who is paying the doctors and driving up healthcare costs? Cooper, and that is right up the alley of its CEO, Norcross.
Frank January 26, 2013 at 05:29 PM
its all starting to unravel. Remember evildoers, You Reap What You Sow
kathy de cicco January 27, 2013 at 12:55 AM
Sounds like the great stent caper that occurred at St. Jospehs Hospital in Towson, Md., a couple of years ago. Always glad when these dishonest medical facilities get caught and fined.
steve January 27, 2013 at 01:53 AM
Here is a thought for discussion. Expenditures like these totaling hundreds of thousands of dollars to nonemployees (in this case physicians) REQUIRES DIRECT APPROVAL OF THE BOARD OF GOVERNORS. There is no plausible denials of knowledge of these payments. I wonder how many employees will be fired by the Board of Governors because of this criminal event.
kathy de cicco January 27, 2013 at 02:25 AM
Well Steve, funny you should mention that. As a result of the stent escapade, St. Joseph's Hospital was bought by and merged with the University of Maryland Medical Center. As a result, many people, including some close friends and relatives, lost their jobs. Duplication of jobs, got to let you go, bye!
kathy de cicco January 27, 2013 at 02:26 AM
And did I mention it's a Catholic hospital?
Darren Gladden January 27, 2013 at 05:38 AM
Yes , Yes it is do we have a problem with that itchy ......SMH http://youtu.be/l0CQ8iaK5s8 Now go take care of that Itch
Mr. Inkman January 27, 2013 at 06:14 AM
The doctors are force to participate. They are paid chump change for the medicare business. The doctor makes the money off the surgery and the hospital doe not give the business to the independent home health care companies. They keep it. at 4500 a pop. Its all about keeping the business in house. The patient is clueless unless they have used a home healthcare company before. The hospital only gets a slap on the hands in fines ...see bad boys OK don't do it again OK..... OK we won't. Its the patient rights to have the service of there choice and 99% haven't a clue.
felix January 27, 2013 at 07:33 AM
Tenet Health Care did something similar at Alvarado Hospital in San Diego. They were charged and forced to sell hospital.
agent itchy January 27, 2013 at 01:00 PM
so you have basically admitted that your comments have no merit. you're a republican hell bent on throwing Norcross under some bus because some doctors stole some money. then you attach an old song to the thread as a sign you have no argument of logic and reason. you have shown yourself to be a biased windbag.
agent itchy January 27, 2013 at 01:05 PM
...and honestly, learn to use punctuation. reading your posts are painful
TJ January 27, 2013 at 01:38 PM
I thought Cooper was a good hospital with honorable doctors and management. I'm glad iI saw this article. I will never use the hospital or any doctors affiliated with them again.
Darren Gladden January 27, 2013 at 03:36 PM
You are a Joke behind a fake screen name who cares what you have to say ......Go itch that itch you WInbag and I will learn what I want to learn by the way .
Big Daddy 1 January 27, 2013 at 08:41 PM
Sounds like a good idea (charging them and forcing a sale). Let Cooper be about medicine and not all that other crap.
Radiohead January 28, 2013 at 07:47 PM
TW You are clueless. There are no doctors taking any money from pharmaceutical companies to write painkillers. People who abuse painkillers have only themselves to blame. Sure there are a few bad doctors out there. But pharmaceutical companies cannot even give pens or paper to docs anymore. Your statement is born of complete and utter ignorance .
Radiohead January 28, 2013 at 07:51 PM
DiPace does not need that money for whistle blowing. I smell a rat. Are you kidding me?? He blew the whistle because it was way more lucrative to do so. Now if he donates the 2 million to charity then I will eat crow!!!

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