A federal court Monday dismissed a whistle-blower lawsuit alleging that the company that owns Mesa General Hospital and Mountain Vista Medical Center allowed unnecessary medical procedures to be performed and illegally compensated doctors for patient referrals.
The suit was filed against Iasis Healthcare in 2005 in the U.S. District Court of Arizona, and was unsealed last year. Jerre Frazier, a former vice president for ethics and compliance for Iasis, filed the suit on behalf of the federal government.
U.S. District Judge James Teilborg dismissed the suit. However, Phillips & Cohen LLC, which is representing Frazier, plans to appeal the decision with the 9th Circuit Court of Appeals, said Mary Louise Cohen, a partner with Phillips & Cohen.
"We feel very strongly it's an important case," she said. "We think the complaint outlines significant violations and should continue."
Tomi Galin, a spokeswoman for Iasis, said Teilborg made the right decision.
"We are confident the court's decision is correct, and we continue to maintain that the allegations made by Jerre Frazier are baseless and without merit," she said.
The lawsuit alleges that, starting in 1999, Iasis:
Received millions of dollars from Medicare, Medicaid and other federal health programs for referrals made by physicians with whom it had "improper financial arrangements for outpatient and inpatient services."
Received millions of dollars from Medicare, Medicaid and other federal health programs for "medically unnecessary procedures performed by various physicians with whom (it) has improper financial relationships."
The suit also alleges that many "medically unnecessary" procedures, including interventional cardiology, radiology and other procedures, have been performed at Mesa General Hospital and St. Luke's Hospital.
Monday's ruling came after oral arguments on Iasis' motion to dismiss.