Six Hospitals Pay $8.3 Million in Medicare Spine Surgery Case
Earlier this year, three Minnesota HealthEast Care System—St. Joseph's Hospital, St. John's Hospital, and Woodwinds Hospital in the Minneapolis-St. Paul area—paid $2.28 million to settle with the government.
In May 2008, Medtronic Spine (the corporate successor to Kyphon) paid $75 million to settle allegations that between 1999 and 2006, the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an in-patient procedure, the Department of Justice stated.
"The allegations were that these hospitals kept these people overnight in order to turn an outpatient procedure into a hospital admission allowing them to capture the DRG [diagnostic related group] payment," says Matthew Smith, one of the three attorneys with Phillips and Cohen, a Washington, D.C. law firm specializing in qui tam lawsuits that represented the whistleblowers.
Those whistleblowers are two former employees of Kyphon Inc. Craig Patrick, of Hudson, WI, is a former reimbursement manager for Kyphon. Charles Bates of Birmingham, AL, is a former regional sales manager. They will receive $1.4 million, or 17.5% of the hospitals' settlement payments.
They independently went to U.S. Justice officials about their concern that the hospitals and their employer, Kyphon Inc., were violating the federal False Claims Act, Smith says. Kyphon sold a kit that was used in the procedure.
Smith explained that outpatient reimbursement for Kyphoplasty has climbed over time and is now reimbursed around $5,000. When hospitals billed for Kyphoplasty as an inpatient procedure, they were able to charge Medicare on average around $10,000 to $12,000, Smith says.
On June 29, the Department of Justice announced it was investigating hospitals around the country for similar improper inpatient kyphoplasty billings.
Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
- CEO Exchange: Preparing for Population Health
- Advocate, NorthShore Deal Would Create 16-Hospital System
- Better HCAHPS Scores Protect Revenue
- 3 Strategies for Retaining Millennial Employees
- Narrow Networks Cut Costs, Not Quality, Economists Say
- Power of price: In South FL and the nation, healthcare costs often are shrouded in secrecy
- Two NY hospitals to offer free hip and knee replacement surgeries for qualifying patients in December
- Hospital mergers may lead to higher prices
- Healthcare data of 1 million NJ patients compromised since 2009
- CEO Exchange: Pressure is On to Partner, Drive Quality