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CA Joins Whistleblower Suit Against Sutter Health

John Commins, for HealthLeaders Media, April 15, 2011

California Insurance Commissioner Dave Jones has intervened in a whistleblower lawsuit against Sutter Hospitals for alleged false billing of what Jones said could be "hundreds of millions of dollars" for anesthesia services, his office has announced.

"Sutter's alleged fraud comes at the expense of the private health insurance industry, which initially pays for the services, but, ultimately, this unjust burden falls on the shoulders of California's consumers, who must foot the bill for inflated health care premiums," Jones said in a media release.

"We believe the amount of the fraudulent charges is in the hundreds of millions of dollars, if not more. As Insurance Commissioner, I will use the full resources of this Department to root out insurance fraud in all forms and hold all those who engage in such fraud fully accountable."

Sutter Health posted a statement on its website denying the allegations. "Sutter Health believes this case is without merit and that our anesthesia charges are appropriately billed. We intend to vigorously defend this matter," the statement read in part.

In a 23-page complaint filed in California Superior Court in Sacramento, Jones' office alleges that Sutter falsely used an anesthesia billing code to charge for services and supplies that patients and insurers had already paid for, either through other charges on the hospital bill or through the anesthesiologist's bill.

In some instances, the complaint alleges, the billing code was charged even though no anesthesiologist was in the operating room and general anesthesia wasn't provided. Jones' office is seeking unspecified monetary penalties and damages, and injunctive relief.

The suit was originally filed by Rockville Recovery Associates Limited, a New York-based auditor hired by The Guardian Life Insurance Company of America to identify fraudulent claims filed from 2002-2008. Rockville allegedly discovered the fraud after reviewing bills submitted to Guardian by Sutter Hospitals, including at an onsite audit at one of Sutter's facilities, the complaint alleges.

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