Justice Department hits hospitals hard for fraud
One hundred thirty-nine hospitals currently or formerly operated by Tenet Healthcare Corp. will pay the United States and 22 states $17 million to settle allegations that the facilities overcharged federal health care programs in connection with laboratory services.
The U.S. Justice Department announced the settlement recently. Under the settlement, the United States would receive $16.18 million. The remaining $820,000 of the settlement amount would be put in an escrow account for the benefit of the participating states — Alabama, Arizona, Arkansas, California, Florida, Georgia, Indiana, Iowa, Louisiana, Massachusetts, Mississippi, Missouri, Nebraska, Nevada, North Carolina, Oregon, South Carolina, Tennessee, Texas, Washington, West Virginia, and Wyoming.
The settlement with the Santa Barbara, CA-based corporation resolves allegations by the United States that the hospitals submitted claims to the government to pay for laboratory tests without regard as to whether the tests were medically necessary, had been properly ordered by physicians, or were otherwise reimbursable under certain federal health care programs. These programs include Medicare, Medicaid, TRICARE — the military’s health care program — and the Federal Employees Health Benefits Program.
Another Tenet facility, Brotman Medical Center in Culver City, CA, will pay the United States $9.75 million to settle allegations that it overcharged Medicare in connection with the provision of rehabilitation services to hospital patients. The settlement resolves allegations that Brotman improperly charged Medicare at rates reflecting that certain services were made available to patients in beds licensed specifically for the purpose of providing rehabilitation services. The government alleges that, in fact, the services were provided in beds that were not licensed for rehabilitation purposes and that are reimbursable by Medicare at lower rates. Further, the settlement resolves allegations by the government that Brotman misrepresented the square footage of the rehabilitation unit and other units in the hospital on annual cost reports that the health care provider submitted to the Medicare program.
The civil settlement includes a full resolution of claims brought against Brotman and its parent corporation, Tenet Healthcare Corp., by a former controller of Brotman, William Noll, under the qui tam or whistle-blower provisions of the False Claims Act. Noll, who filed his suit against Brotman in September 1998, will receive approximately $1.93 million of the total recovery as his statutory award. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendants.
Another seven U.S. hospitals will pay more than $6.3 million to settle charges that they illegally billed the government for surgical procedures that were not reimbursable. The Justice Department alleged that between 1987 and 1994, the hospitals charged federal health care programs for procedures involving experimen+tal cardiac devices that were not, in fact, reimbursable.
Scripps Health, which owns hospitals in La Jolla and San Diego, CA, will pay the United States $3.8 million. UPMC Health System, owner of two hospitals in Pittsburgh, will pay $1.5 million, according to the Justice Department. Oklahoma City’s Integris Baptist Medical Center will pay $629,000, Hoag Hospital in Newport Beach, CA, will pay $305,000, and St. Joseph’s Regional Medical Center in South Bend, IN, will pay $107,000.
All of the hospitals denied wrongdoing in regard to the cardiac devices. Scripps Health president and CEO Chris Van Gorder said in a statement that the cardiac devices were allowed for use in clinical research. They were considered the best available technology at the time, he said, and the U.S. Food and Drug Admini-stration later approved them.
"We believe we billed in compliance with all Medicare rules and regulations," he said, and settled the case "to avoid the delay, uncertainty, inconvenience, and expense of fighting these claims."
The hospitals were among more than 100 that had been named in a lawsuit filed by a whistle-blower who is a former medical device salesperson. The Justice Department says the whistle-blower will receive more than $1 million of the settlements, and other hospitals still are under investigation.