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Insurance provider files suit against KDMC

A New York-based insurance company has filed a lawsuit against King’s Daughters Medical Center, claiming it should not be responsible for plaintiffs seeking damages from what they allege are unnecessary and inappropriate cardiac procedures.

The lawsuit, filed Aug. 11 in U.S. District Court Eastern District, seeks “declaratory relief” for Homeland Insurance Company of New York and states a controversy exist relating to whether the insurance company’s policies provide coverage for the claims at issue.

“Homeland seeks a declaration that the (policies) do not provide coverage for the claims against provider defendants in the underlying actions,” according to the suit.

The provider defendants in the case are named as KDMC, the Kentucky Heart Institute, Dr. Richard E. Paulus, Dr. Sriharsa Velury, Dr. Richard Heuer, Dr. Nallathamby Thayapran, Dr. John Van Deren and Dr. Matthew Shotwell.

The underlying actions are 13 lawsuits filed by patients seeking damages arising out of allegedly unnecessary cardiac procedures and, according to the suit, arise from the central allegation that provider defendants performed unnecessary cardiac procedures not due to misdiagnosis and “knowingly subjected” plaintiffs to “significant medical risks” based on “fraudulent concealment of medical facts.”

In what is being called the largest federal health care fraud settlement involving a hospital in the history of Kentucky’s eastern district, King’s Daughters Medical Center announced on May 29 it would pay more than $40 million to the U.S. government.

The payout resolves an investigation by the U.S. Department of Justice into allegations the Ashland-based hospital made millions of dollars by falsely billing state and federal health care programs for heart procedures that were performed on patients who didn’t medically need them.

Homeland is being represented by Lexington, Ky., law firm Fulkerson, Kinkel and Marrs.