Summit, N.J.-based Atlantic Health System and Overlook Hospital will pay nearly $9 million to resolve whistleblower allegations that they overbilled Medicare for about seven years by admitting patients on an inpatient basis rather than the less-costly outpatient basis to boost reimbursements, the U.S. Justice Department announced yesterday.
"Proper billing ensures fair compensation and protects Medicare dollars that are much needed for patient care," J. Gilmore Childers, First Assistant U.S. Attorney for the District of New Jersey, said in a statement. "Hospitals taking more than their entitled share of reimbursements by improperly billing services as more expensive services, subject themselves to federal scrutiny," he said.
Even though they denied wrongdoing, the hospital and its parent company decided to settle to put an end to an inquiry regarding hospital activity between 2002 and 2009, as well as to avoid continuing litigation costs, MyCentralNJ.com reported.
Atlantic Health System also entered into a five-year Corporate Integrity Agreement, under which Overlook Hospital will establish internal processes to comply with Medicare requirements, noted the article.
While the DoJ cracked down on Atlantic Health System for inflated inpatient admissions, a study in this month's Health Affairs found that hospitals are admitting more patients under observation status and treating them as outpatients to avoid Medicare penalties associated with readmissions, often leaving patients eating more of the costs, FierceHealthcare previously reported.
Meanwhile, in another whistleblower case, an Oklahoma hospital and physician agreed to pay $550,000 to resolve claims they defrauded Medicare and Medicaid, the Insurance Journal reported.
Each has denied liability, although Harmon County Healthcare Authority agreed to pay $550,000 and Akram R. Abraham agreed to pay $1,000,000 to settle the lawsuit, which alleged that both parties violated Stark and anti-kickback statutes from July 1, 2001 through May 30, 2008.