Shands issued a press release stating that it cooperated with the investigation and negotiated the settlement "to avoid long and costly litigation. While there has been no admission of liability, Shands HealthCare hospitals in Gainesville and Jacksonville will pay a total of approximately $26 million plus interest: $25.2 million to the United States under the Medicare program and $829,600 to the State of Florida under its Medicaid program."
The settlement results from a whistleblower lawsuit filed in 2008 in federal court in Jacksonville, FL, by Terry Myers, the president of a healthcare consulting firm, YPRO Corp. Shands said it had hired Myers as an independent consultant in 2006 and 2007 to conduct a routine audit of its billing practices. Myers' share of the settlement has yet to be determined, prosecutors said.
"The audit showed inconsistent billing processes in 2006 and 2007. Allegedly, for some patients, Shands may have billed Medicare and Medicaid for short overnight inpatient admissions rather than for less expensive outpatient or observation services. In each case of alleged overbillings, the patient received all services ordered," Shands said in a media release.
Timothy M. Goldfarb, CEO of Shands HealthCare in Gainesville, said in a media release that "the case in question does not involve the failure to provide high-quality patient care, but rather inconsistent billing processes. We proactively initiated an independent audit that identified some opportunities to improve billing processes at Shands. We took immediate steps to make improvements."