Newark, NJ - The University of Medicine and Dentistry of New Jersey (UMDNJ) is firing two cardiologists and cutting the salaries of others as part of a plan to crack down on an illegal kickback scheme that had doctors accepting no-show jobs in return for referring patients to the university's faltering cardiac surgery program. In addition to these changes, the cardiology program, run by UMDNJ, will now operate under greater oversight to ensure that doctors are earning their paychecks and not simply referring patients, according to the Newark Star-Ledger [1].

"Let me emphasize that this is the first step, certainly not the last," UMDNJ's interim president, Bruce Vladeck, said in the memo, sent Wednesday to Robert Johnson, interim dean of the New Jersey medical school in Newark. The memo was obtained by the Star-Ledger.

The saga, however, is likely not over, as the report, issued by the school's federal monitor, former federal judge Herbert Stern, accuses Vladeck and other university administrators of intentionally misleading investigators and attempting to bury previous concerns raised about the illegal referral program. The report says that UMDNJ took in $36 million in illegal Medicare and Medicaid payments as part of the kickback scam, which paid cardiologists to refer their patients to the university's cardiac surgery program [2].

News of the illegal kickback scheme was broken by Star-Ledger reporters Ted Sherman and Josh Margolin, who found that 18 cardiologists were paid as much as $150 000 a year to refer their patients to the university's cardiac surgery program, which was under threat of closure for poor performance [3]. The cardiologists were made "clinical assistant professors," but, despite having contracts stipulating a range of services they were expected to perform, the doctors did not spend much time at the university, and the appointments were actually just a scheme to get around federal law that forbids payment for patient referrals.

The controversy over the cardiologists first emerged when the university's former chief of cardiology, Dr Rohit Arora, filed a wrongful-termination suit, charging that UMDNJ broke the law and then forced him out when he objected to the plan. Arora, now a professor of medicine at Chicago Medical School, is quoted as saying the faculty appointments were a sham to mask illegal payments to doctors and were "immoral and totally unethical."

After news of illegal kickback scheme broke, an investigation by the school's federal monitor found that, over a four-year period, the university took in $36 million from more than 2700 procedures. During this time, the doctors "earned" payments of $5.7 million. With fines and penalties, the Star-Ledger reports, UMDNJ might be forced to pay back more than $80 million to federal and state governments.

In the memo, Vladeck outlines a reorganization plan precipitated by Stern's allegations and also lists cardiologists involved in the program, those being terminated, and those whose salaries are to be cut back. Drs Bakul Desai and Rakesh Sahni are to be terminated, while the remaining doctors are to have their salaries cut, most in half.

Vladeck, however, is not yet out of the hot seat, as Stern contends in his report that Vladeck intentionally misled investigators and that UMDNJ violated an agreement with prosecutors by failing to cooperate with the monitor's office during the five-month inquiry.

According to the monitor's report, UMDNJ did not inform authorities of the Arora settlement, a violation of an agreement signed by UMDNJ when it was charged with a separate Medicaid fraud that involved the double billing of at least $4.9 million in procedures. In addition to not informing authorities of the Arora settlement, the monitor contends that Vladeck and others sought to discredit a report by one of the university's outside consultants. This report raised red flags about the faculty appointments, but instead of correcting the problem, Vladeck and others at UMDNJ simply tried to "refute, rebut, and bury the consultant's report and other allegations."

The university president said he missed information about the program's problems, was never briefed on the $2.2 million settlement, and did not know that outside auditors had already discovered the scheme in the cardiac surgery program. Regarding the allegations that he withheld information from the monitor, Vladeck denies that individuals in leadership roles at UMDNJ, including himself, had deliberately concealed or withheld information from the federal monitor, the Star-Ledger writes.

In his report, Judge Stern said the kickback scheme began in 2002 and infiltrated all levels of the university's teaching hospital and central administration. Stern accuses top administrators of being complicit "in first forming and expediting this illegal plan and later in covering it up." He called the appointments given to the cardiologists a front for paying for referrals that was "nothing more than a poorly disguised cover-up of knowing and willful violations of federal law."


According to the monitor's report, Sidney Mitchell, CEO of University Hospital, James Archibald, a former senior vice president for administration and finance, Dr Jerrold Ellner, head of the department of medicine, and Vivian Sanks King, the former vice president for legal management, were the architects of the illegal scheme.

Yesterday, Robert Del Tufo, chair of the board of UMDNJ, announced the appointment of an ad hoc committee of the board of trustees to review the cardiology program. Del Tufo, a former US attorney and New Jersey attorney general, has asked the committee to "pay specific attention to allegations in the federal monitor's report."