Healthcare News & Insights

Hospitals pay $10.1M for alleged False Claims Act violations

A group of Florida hospitals has agreed to pay the federal government $10.1 million to resolve allegations that they violated the False Claims Act (FCA).

According to the Department of Justice, Morton Plant Mease Health Care, Inc., and its affiliated hospitals (Morton Plant Hospital, St. Joseph’s Hospital, Morton Plant North Bay Hospital, St. Anthony’s Hospital, Mease Countryside Hospital and Mease Dunedin Hospital) were accused of submitting false claims for services rendered to Medicare patients.

The specific allegations claimed that between July 1, 2006, and July 31, 2008, the facilities improperly billed for certain interventional cardiac and vascular procedures as inpatient care, when those services should have been billed as less costly outpatient care or as observational status.

“Overbilling the government for routine procedures wastes valuable resources that could be used to care for other patients,” said Stuart Delery, principal deputy assistant attorney general for the Justice Department’s Civil Division, in a press release.  “At a time when we are trying to reduce public spending, it is especially important to ensure that hospitals do not overcharge the government by improperly inflating their billing.”

Whistleblower lawsuit

This settlement is the direct result of a whistleblower lawsuit filed by Randi Ferrare, a former director of Health Management Services at Morton Plant Hospital.

Ferrare will share in the government’s recovery to the tune of over $1.8 million.

“We hold medical providers to a high standard in our district, and we will not hesitate to hold them to account when we find evidence of serious misconduct,” said Robert O’Neill, U.S. attorney for the Middle District of Florida. “This settlement should send a strong message that healthcare fraud enforcement is a growing priority in our office.”

Corporate integrity agreement

As part of the settlement, the hospitals have entered into a corporate integrity agreement (CIA) with the Office of Inspector General (OIG) to promote compliance with the statutes, regulations and written directives of Medicare, Medicaid and all other federal healthcare programs.

“When hospitals attempt to boost profits with improper inpatient admissions, they squander scarce dollars from Medicare and Medicaid,” said Daniel Levinson, inspector general of the Department of Health & Human Services (HHS). “Our corporate integrity agreements hold providers accountable for preventing such abuse of government health care programs.”

By entering into the settlement, however, the hospitals aren’t admitting to any liability or wrongdoing. The settlement allows the hospitals to avoid a lengthy and expensive litigation.

This resolution is part of the government’s emphasis on combating healthcare fraud and another step for the Healthcare Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, secretary of HHS in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.

To date, the Justice Department’s total recoveries in FCA cases since January 2009 are over $13.8 billion.




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