Ex-case manager director blows whistle on health system Medicare fraud

Texas-based Christus Spohn Health System has paid more than $5.1 million to settle allegations that its hospitals falsely billed Medicare, the United States Attorney's Office said Thursday.

The former director of case management, Cecilia Guardiola, at Spohn Shoreline filed a lawsuit in 2008, alleging that the six Christus Spohn hospitals (Shoreline, Corpus Christi-Memorial, Corpus Christi-South, Alice, Beeville and Kleberg) were submitting false claims to Medicare. The former case manager director said the hospitals billed for outpatient services, particularly outpatient surgical procedures, that were called inpatient services so the hospitals could gain higher reimbursements. Prosecutors noted that many patients were often discharged from the hospital in less than 24 hours.

Guardiola complained to hospital administrators about the upcoding, but her complaints went unheard, KZTV10 reported.

However, the health system said they caught the billing error through an audit, not through Guardiola.

"The issue of whether patient care is inpatient or outpatient is incredibly complex. As a result we conduct regular internal audits; it is through this review process, that we uncovered the issue and began corrective action well before learning of the government's investigation."

Christus Spohn said it disagrees with the government's overall characterization of this issue. "We remain committed to our core value of Integrity."

Under the False Claims Act, Guardiola is eligible to receive 20 percent of the $5.1 million recovery--about a million dollars, according to the Justice Department.

For more information:
- read the DoJ statement
- see the KZTV10 report
- check out the settlement terms (.pdf)

Related Articles:
Medicare pays outpatient providers twice, leading to $6M overpayments
Hospitals evade audits, penalties with observation status
Brigham and Women's overbilled Medicare $1.5M
Boston Medical Center owes $90K for Medicare billing errors
Medicare collects almost $800M in overpayments

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