Hospitals Will Pay $28 Million for False Medical Claims

The U.S. Justice Department is cracking down on hospitals found purposefully billing Medicare incorrectly for their own profit gain.

Thirty-two more hospitals located in 15 different states agreed to pay the U.S. government more than $28 million to settle allegations that they billed Medicare for kyphoplasty procedures as inpatient rather than outpatient services to make more money.

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Among the facilities that recently settled are the Cleveland Clinic, which will pay $1.74 million, and five hospitals in the Community Health Systems, which will pay $3.5 million.

These settlements are the latest in a long-running whistle blower lawsuit that alleged Kyphon Inc. encouraged hospitals to perform the kyphoplasty procedures as inpatient rather than outpatient in order to help pay for the kits used in the process.

In all, more than 130 hospitals have reached settlements with the U.S. Justice Department totaling $105 million.

Kyphoplasty is currently considered a minimally invasive procedure used to treat certain spinal fractures often caused by osteoporosis. In most cases, the procedure can be performed safely and effectively as an outpatient procedure without the need of a more costly inpatient hospital admission.

Benjamin Mizer, head of the Justice Department’s Civil Division, emphasized how these purposeful errors “waste the country’s vital health care dollars.”

“The Department of Justice is committed to ensuring the Medicare funds are expended appropriately based on the medical needs of patients rather than the desire to maximize hospital profits,” he said.

All but three of the 32 hospitals that recently settled were named as defendants in the previously filed whistleblower lawsuit. Craig Patrick, a former reimbursement manager for Kyphon, and Charles Bates, a former regional sales department for the company, filed the lawsuit in 2005. The two will receive about $4.75 million for the most recent settlements.

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The government also previously settled with Medtronic Spine LLC, the corporate successor to Kyphon, for $75 million.

The case stands as an example of the importance of regulation and vigilance in the health care sector, an industry where billions are spent annually. It remains important not only for the government to investigate the country’s spending, but also for citizens to be responsible consumers and ask questions about the medications and procedures performed.