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Whistleblower Costs Health System $12M for Fraudulent Billing

Analysis  |  By Amanda Norris  
   May 22, 2023

A large health system allegedly issued claims for urgent care services billed at a higher level of service than received by patients.

St. Elizabeth’s Hospital of the Hospital Sisters Health System, a multi-institutional healthcare system that sponsors 15 hospitals in 14 communities across Illinois and Wisconsin as well as an integrated physician network, is under fire.

The system agreed to pay $12.5 million to resolve allegations from a whistleblower lawsuit which alleges it committed billing errors that may have resulted in an overpayment for services, according to a release from the U.S. Attorney’s Office for the Central District of Illinois.

The whistleblower lawsuit alleges that the hospital submitted these claims for urgent care services billed at a higher level of service, according to the news release. When the errors were brought to the attention of St. Elizabeth, the hospital fully cooperated with the Department of Justice’s investigation.

St. Elizabeth is not admitting any wrongdoing but has agreed to settle the claims to avoid the expense and uncertainty of litigation. The claims resolved by the settlement are allegations only, and there has been no determination of liability, the release said.

Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery.

This lawsuit comes at the same time as allegations against Yale New Haven Health and Northeast Medical Group were settled for allegedly submitting false Medicare and Medicaid claims, which has since resulted in a hefty settlement from the system.

In the Yale whistleblower case, the settlement agreement totaling $560,718 should resolve allegations of overbilling by Yale, violating federal and state laws for submitting false claims to Medicare and Medicaid for services billed by physicians when they should’ve been billed at the lower reimbursement rate of mid-level providers, according to the Department of Justice.

Revenue cycle leaders should ensure all their teams—everyone from coders to providers—understand the financial penalties associated with False Claim Act violations and be familiar with all other compliance penalties.


Amanda Norris is the Director of Content for HealthLeaders.

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