Pennsylvania Record

Monday, October 21, 2019

Whistleblower's lawsuit alleging scheme at Wheeling Hospital defrauded Medicare transferred to West Virginia


By Karen Kidd | Jun 25, 2019

PITTSBURGH –  The U.S. District Court for the Western District of Pennsylvania recently agreed to transfer a federal whistleblower lawsuit that alleges a hospital overpaid physicians in a scheme to funnel millions in services to the hospital to a federal court in West Virginia.

In her seven-page opinion issued June 10, U.S. District Judge Marilyn J. Horan granted a motion by defendants in the case to transfer venue to the U.S. District Court for the Northern District of West Virginia. 

"There is no dispute that this action may have been brought in the Northern District of West Virginia, and therefore the venue in the proposed transferee district is proper," Horan said in her opinion.

The whistleblower lawsuit filed in Pennsylvania by Louis Longo, former executive vice president of Wheeling Hospital in West Virginia who now lives in Pittsburgh, alleges the hospital, CEO Ronald Violi and the hospital's management firm, Pittsburgh-based R&V Associates, defrauded Medicare and Medicaid through a scheme involving excessive compensation to doctors. The qui tam lawsuit, joined by the Justice Department, claims the payments allegedly were based on the volume or value of patient referrals and the money paid in patient treatment.

The excessive compensation had been part of a scheme for the hospital to achieve "monopolistic power and dominating market share" in the Ohio Valley region, the lawsuit said. Defendants allegedly violated the Stark Law, which prohibits referrals and improper financial relationships between doctors of Medicare patients and hospitals, as well as the Anti-Kickback Statute and False Claims Act.

In March, Wheeling Hospital countersued Longo, claiming breach of fiduciary duty and abuse of process.

The same month, the Justice Department filed its intervener's complaint that accused defendants in Longo's lawsuit of fraudulent schemes to bill Medicare.

Last May, the defendants filed their motion to transfer venue to West Virginia.

In her opinion, Horan found "that nearly all of the operative facts" so far presented in court took place in West Virginia.

"While there are connections to this district, consideration of where the operative facts arose strongly favors transfer to the Northern District of West Virginia," the opinion said. "In addition, the court agrees with defendant that the local interest in deciding local controversies at home, in this case, strongly favors transfer to West Virginia."

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