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55 Hospitals to Settle False Medicare Claim Charges for $34M

 |  By Margaret@example.com  
   July 03, 2013

Twenty-three facilities in seven states that are affiliated with the for-profit HCA Inc., six affiliated with Lifepoint, and four with Trinity Health were charged with submitting false claims to Medicare for a procedure to treat spinal fractures.

Fifty-five hospitals in 21 states have agreed to pay more than $34 million to settle allegations that they submitted false claims to Medicare for kyphoplasty procedures, the U.S. Department of Justice announced Tuesday.

Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. It can be performed on an outpatient basis, but the hospitals involved in the settlement admitted patients and billed it as more costly inpatient care, according the DOJ. The DOJ stated that "the claims resolved by these settlements are allegations only, and there has been no determination of liability."

"Hospitals that participate in the Medicare program must bill for their services accurately and honestly," Stuart F. Delery, acting assistant attorney general for the civil division of the DOJ, said in a press statement. He added that the DOJ "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."

The settling hospitals include 23 facilities in seven states that are affiliated with the for-profit HCA Inc. The Nashville-based healthcare company will pay $7.14 million in settlement monies.

In an e-mail exchange, an HCA spokesperson stated, "we are pleased to see new clarification of industry care standards, which help physicians make decisions regarding kyphoplasty patients, and we are confident as a result that this issue has been resolved."

HCA, which operates 162 hospitals in 22 states, is no stranger to fraud settlements. Between 2000 and 2003, HCA paid $1.7 billion to the federal government to settle an extensive false claims investigation that included Medicare and other federal health programs.

In addition to the 23 HCA hospitals, other multi-location facilities in the kyphoplasty settlement include:

  • Six hospitals affiliated with the Brentwood, TN-based Lifepoint Hospitals Inc., which will pay $2.5 million.
  • Five hospitals affiliated with the Livonia, MI-based Trinity Health, which will pay $2.4 million.
  • Four hospitals affiliated with the Clearwater, FL-based Morton Plant Mease BayCare Health System, which will pay $3.9 million.

The settlements bring to a close an investigation that has led to more than 100 hospitals paying $75 million to resolve allegations that they mischarged Medicare for kyphoplasty procedures.

The investigation stemmed from a 2008 qui tam (whistleblower) lawsuit filed in federal district court in Buffalo by two former employees of Kyphon Inc., which sold the equipment and materials used to perform kyphoplasty. The two contended that hospital and Kyphon violated the federal False Claims Act.

The whistleblowers alleged that the company persuaded the hospitals to perform the procedure on an inpatient basis to capture larger Medicare payments, Matthew Smith, an attorney with Phillips & Cohen LLP, the Washington, D.C. law firm that represented the whistleblowers, explained in a telephone interview.

Kyphon sold to hospitals kyphoplasty kits valued at about $3,400. Although Medicare outpatient reimbursement grew overtime, Smith says inpatient reimbursement averaged between $6,000 and $12,000, depending on co-morbidities listed and whether the hospital performed a bone biopsy.

He added that "inpatient care generally isn't medically necessary for routine, scheduled kyphoplasty procedures."

Medtronic Inc., which acquired Kyphon in 2007, settled the 2008 qui tam suit for $75 million. Tuesday's settlement brings the total amount recovered from kyphoplasty-related cases to more than $149 million.

Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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