5 hospitals join settlement on overcharging

Print Friendly and PDF By: Andy Miller Published: Jul 2, 2013

Five hospitals in Georgia are among 55 facilities in 21 states settling allegations of overcharging Medicare for a back procedure.

The overall $34 million settlement, announced Tuesday, involved a false claims case involving kyphoplasty, a procedure for treating spinal fractures that are frequently caused by osteoporosis.

The U.S. Department of Justice said in a press release that in many cases, kyphoplasty can be performed effectively as an outpatient procedure, avoiding the additional expense of a hospital admission. The settlements resolved allegations that the hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis.

All of the five Georgia hospitals were part of the HCA chain, though two are no longer operating as company facilities.

Northlake Medical Center in Tucker closed in 2006, while HCA sold Palmyra Medical Center in Albany to the local hospital authority in 2011. (That deal is being contested by the Federal Trade Commission and is the subject of legal proceedings.)

The other three hospitals involved in Georgia are Coliseum Medical Centers and Coliseum Northside Hospital, both in Macon; and Redmond Regional Medical Center in Rome.

A total of 23 HCA hospitals have agreed to pay a total of $7.1 million. The other 32 hospitals are either part of other hospital chains or health systems, or are independent facilities.

HCA, through a spokesman, said in a statement, “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.’’

The Justice Department said it now has reached settlements with more than 100 hospitals, totaling about $75 million, to resolve allegations of mischarging for kyphoplasty. In addition, the government settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million over charges that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty as an inpatient rather than an outpatient procedure, the agency said.

All but four of the settling facilities were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act. The law allows private citizens to bring lawsuits on behalf of the United States and receive part of the proceeds of any settlement or judgment awarded against a defendant.

Two whistleblowers will receive a total of about $5.5 million from the settlements announced Tuesday, the Justice Department said. The claims resolved by these settlements are allegations only, and there has been no determination of liability, the agency said.

Washington, D.C. -based law firm Phillips & Cohen represented the two whistleblowers.

“This isn’t a case of simple paperwork errors or innocent misunderstanding of Medicare rules,” said Tim McCormack, a lawyer with Phillips & Cohen, in a statement. “Hospitals across the country misrepresented the type of treatment they provided to patients so they could bill Medicare for expensive inpatient stays.”

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