Hospital pays $9 million for False Claims Act allegations
Overlook Medical Center in Summit, NJ, and its parent companies have agreed to pay the United States $9 million to settle allegations that they violated the False Claims Act, the Justice Department announced recently.
The settlement resolves allegations that Overlook owned and operated by AHS Hospital Corp. and Atlantic Health Systems, overbilled Medicare for patients who were treated on an inpatient basis when they should have been treated as observation patients or on an outpatient basis.
The settlement partially resolves a False Claims Act suit filed by former employees of Overlook, said Stuart F. Delery, JD, acting assistant attorney general for the Department’s Civil Division, in announcing the settlement. “We expect hospitals that participate in Medicare will bill for their services accurately and honestly,” Delery said. “Hospitals have a responsibility to ensure that the Medicare rules are not abused and patients who should be treated as outpatients are not admitted as inpatients, increasing the hospitals’ reimbursements.”
The settlement is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by the Department of Health and Human Services in May 2009. The partnership between the two departments has focused on efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $7.7 billion since January 2009 in cases involving fraud against federal healthcare programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $11.3 billion.
In a similar case, Christus Spohn Health System Corp. has paid the United States more than $5 million to settle allegations regarding violations of the False Claims Act, U.S. Attorney Kenneth Magidson, JD, announced recently. The allegations included inappropriately admitting patients to inpatient status for outpatient procedures.
The settlement resolves allegations that six Christus Spohn hospitals in and around Corpus Christi, TX, submitted false claims to the Medicare program by using inpatient codes for procedures that should have been billed under an outpatient code. The investigation leading to the settlement began in March 2008 after a former director of case management filed a lawsuit under the qui tam provisions of the False Claims Act alleging the six hospitals were submitting false claims to the Medicare program by billing for services that should have been performed on an outpatient basis as if they were more expensive inpatient services.
The allegations stated that these hospitals routinely were billing outpatient surgical procedures as if they required an inpatient level of care, which greatly increased the amounts paid to these hospitals by the Medicare program. These patients often were discharged from the hospital in less than 24 hours.
In this case, the whistleblower will receive 20% of the $5.1 million recovery.
Overlook Medical Center in Summit, NJ, and its parent companies have agreed to pay the United States $9 million to settle allegations that they violated the False Claims Act, the Justice Department announced recently.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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