False Claims Act settlements are in vogue

Hospitals across the country started the new year by making payments ranging from the thousands to millions of dollars to settle allegations of Medicare fraud. These settlements are sure to drive up the Department of Justice's (DOJ) healthcare recoveries under the False Claims Act, which have topped $2.2 billion since January 2009.

Last week, Brookhaven Memorial Hospital Medical Center in Long Island, N.Y. agreed to pay $2.9 million plus interest in a civil settlement, according to the DOJ. In November 2009, the federal government intervened in an ongoing whistleblower lawsuit brought under the False Claims Act, alleging that Brookhaven inflated charges to obtain supplemental Medicare outlier payments "for cases that were not extraordinarily costly and for which outlier payments should not have been paid." The DOJ has recovered more than $1.2 billion from hospital outlier fraud since 2006.

Earlier in the month, Mercy Hospital Inc. (d/b/a Mercy Medical Center) in Springfield, Mass., agreed to pay a $2.8 million settlement. The government alleged that the hospital violated the False Claims Act between 2005 and 2006 "by failing to provide, or failing to document that it provided, the minimum number of hours of rehabilitation therapy required under Medicare guidelines." The settlement resulted from Mercy's self-reported June 2007 disclosure to the Office of Inspector General in the U.S. Department of Health and Human Services that it couldn't prove it had provided required minimum levels of rehabilitation therapy to patients.

Also in February, Southern New Hampshire Medical Center in Nashua agreed to pay $33,400 to resolve allegations that the hospital violated the False Claims Act by improperly billing Medicare for services provided by a temporary staffing agency employee who had been excluded from federal healthcare programs.

In addition, Johnson Memorial Hospital in Stafford, Conn., agreed to pay a $191,193 settlement. The federal government alleged that the hospital overbilled Medicare for infusion therapy, chemotherapy administration and blood transfusion services between 2000 and 2005. "What happened here is an honest mistake," says Peter Betts, the hospital's interim president and CEO. "We would not knowingly overbill."

In January, Wheaton (Minn.) Community Hospital joined with the city of Wheaton and a physician to collectively pay $846,461 to settle allegations that hospital admission practices violated the False Claims Act. From 1998 to 2004, Wheaton "admitted some patients and kept others admitted to acute care when doing so was not medically necessary," says the DOJ. "The defendants then billed Medicare for the cost of these hospital admissions."

For more:
- see this DOJ press release about the Brookhaven settlement
- see this DOJ press release about the Mercy settlement
- see this Boston Business Journal article
- see this press release about the Southern New Hampshire settlement
- see this Hartford Courant article
- see this DOJ press release about the Wheaton settlement

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