55 hospitals to pay $34 million for overcharging Medicare

By Jerry Seper
The Washington Times
Tuesday, July 2, 2013

Fifty-five hospitals in 21 states agreed on Tuesday to pay the U.S. government more than $34 million to settle allegations that the health care facilities submitted false claims to Medicare for kyphoplasty procedures, the Justice Department said. Kyphoplasty is a minimally invasive procedure used to treat certain spinal fractures that often are due to osteoporosis.
“Hospitals that participate in the Medicare program must bill for their services accurately and honestly,” said Acting Assistant Attorney General Stuart F. Delery, who heads the department’s Civil Division. “The Department of Justice is committed to ensuring that Medicare funds are expended appropriately, based on the medical needs of patients rather than the desire of medical providers to maximize profits.”
In many cases, the Justice Department said, kyphoplasty can be performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission. The settlements resolve allegations that the settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings.
The hospitals that agreed to the settlement were located in Alabama, California, Delaware, Florida, Georgia, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Tennessee and Texas.
“Whenever hospitals knowingly overcharge Medicare, critically needed resources are wasted and health costs are driven up,” said Inspector General Daniel R. Levinson at the Department of Health and Human Services. “When taxpayers’ dollars are threatened, OIG and its federal partners will take action.”
The Justice Department now has reached settlements with more than 100 hospitals totaling approximately $75 million to resolve allegations they mischarged Medicare for kyphoplasty procedures. In addition to Tuesday’s settlement, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million to settle allegations the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.
All but four of the settling facilities were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant.
The lawsuit was filed in federal district court in Buffalo, N.Y., by Craig Patrick, a former reimbursement manager for Kyphon, and Charles Bates, a former regional sales manager for Kyphon in Birmingham, Ala. They will receive $5.5 million from the settlements.

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