Healthcare News & Insights

Children’s hospital system pays $1.5M to settle double-billing lawsuit

Double billing for radiology services has proved costly for one Texas children’s hospital system – to the tune of $1.5 million.

According to a press release issued by the office of the Attorney General of Texas, Children’s Physician Services of South Texas (CPSST), a subset of Driscoll Children’s Hospital in Corpus Christi, TX, agreed to pay the amount to settle a whistleblower lawsuit.

The case was filed by a former revenue manager and coding compliance officer who worked with an affiliate of the hospital, Radiology Associates. (Radiology Associates was also named in the lawsuit.)

The case alleged that CPSST violated the False Claims Act and the Texas Medicaid Fraud Prevention Act on numerous occasions from January 2002 to June 2007 when billing for genetic ultrasounds.

CPSST had an agreement with Radiology Associates regarding billing practices for the ultrasounds. Radiology Associates was under the impression that CPSST was only billing for the technical component of each ultrasound. The radiology group would then bill for the professional component of the tests, which included reading and interpreting the results.

In reality, CPSST was billing for both the professional and technical component for each exam, collecting money from Medicare, Medicaid and various other insurance carriers for services it hadn’t provided.

When Radiology Associates brought this issue to CPSST’s attention, representatives from the hospital said double billing wasn’t common and only occurred in a few isolated incidents.

Despite evidence to the contrary, Radiology Associates accepted this explanation and continued billing for the professional component of the ultrasounds. Meanwhile, CPSST continued to simultaneously bill for both components.

Once CPPST’s billing practices came to light, the hospital decided to settle the case. And because of its role in the double-billing scheme, Radiology Associates also agreed to pay over $800,000 in the settlement.

Not worth the risk

The lesson here is clear: Improper billing practices only lead to big trouble (and big financial payouts) for hospitals.

“[This] settlement should serve as notice to healthcare providers that taxpayers will not tolerate, much less accept, paying twice for services rendered to them,” said United States Attorney Kenneth Magidson in the press release.

It’s also important to note that in cases where a hospital provides one portion of a service, and another healthcare entity furnishes the other, each party’s role should be spelled out clearly, in writing, so there will be no mistakes made on the billing end.

If any billing discrepancies are discovered in your hospital, they shouldn’t be swept under the rug in hopes no one will discover them. Rather, consult your hospital’s legal team immediately so you’ll be able to take the most prudent course of action to protect your hospital.

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