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Hospitals to pay $34M on false claims

55 facilities settle with Justice Department on spinal procedures

Fifty-five hospitals located in 21 states will pay a total of $34 million to settle allegations that they submitted false claims to Medicare for a spinal procedure that often can be performed on an outpatient basis without the need of costly hospital admissions, the Department of Justice said in a news release.

The minimally-invasive procedure, called kyphoplasty, is used to treat certain spinal fractures that often are due to osteoporosis.

[See also: Fraud recoveries on the rise]

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The settlements resolve allegations that the hospitals frequently billed Medicare for kyphoplasty procedures on the more costly inpatient basis in order to increase their Medicare reimbursements.  

“Hospitals that participate in the Medicare program must bill for their services accurately and honestly,” said Stuart Delery, acting assistant attorney general for the Civil Division of the Department of Justice, in the news release.

The providers included 23 hospitals affiliated with HCA Inc., of Nashville, Tenn., which combined will pay $7.15 million; six hospitals affiliated with Lifepoint Hospitals Inc., of Brentwood, Tenn., $2.5 million; five hospitals affiliated with Trinity Health, Livonia, Mich., $3.9 million; and four hospitals affiliated with Morton Plant Mease BayCare Health System, Clearwater, Fla., $2.4 million.

Atrium Medical Center, Middletown, Ohio, will pay the largest individual settlement of $4.2 million.

[See also: HCA agrees to pay $16.5M to settle false claims allegations]

The Justice Department settled in 2008 with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures, the release said. 

The settlements were the result of coordination among the U.S. Attorney’s Office for the Western District of New York, the Commercial Litigation Branch of the Justice Department’s Civil Division, and the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.

The claims resolved by these settlements are allegations only, and there has been no determination of liability, the Justice Department noted.

All but four of the settling facilities were named as defendants in a whistleblower lawsuit brought under the False Claims Act, filed in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates, both former managers for Kyphon, the release said.

[See also: Feds take down 89 people in eight cities in Medicare fraud totaling $223 million]