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Shands to pay $26M for false claims

Six of the Florida system's hospitals allegedly overbilled Medicare and Medicaid

Florida’s Shands Healthcare has agreed to pay $26 million to settle allegations that six of the network’s hospitals had billed Medicare, Medicaid and the Department of Defense’s TRICARE healthcare program for inpatient procedures that should have been processed as outpatient services, the Justice Department said Monday.

The six Shands hospitals, including its facility at the University of Florida, allegedly submitted the false inpatient claims during the period from 2003 through 2008, the DOJ said in a news release.

[See also: Hospitals to pay $34M on false claims ]

The six Florida hospitals were named as defendants in a whistle-blower lawsuit, filed in 2008, brought under the False Claims Act by Terry Myers, president of a healthcare consulting firm, YPRO Corp. Medicare and the other federal healthcare payers will receive nearly $25.2 million of the $26 million settlement, the DOJ said in the press release, adding that Myers’ portion of the recoveries had not yet been determined.

Shands said in a news release that Myers had been hired in 2006 and 2007 to perform routine auditing of the hospitals’ billing processes and found inconsistencies indicating that Shands may have allegedly billed Medicare and Medicaid for short overnight inpatient admissions rather than for less expensive outpatient or observation services. Patients received all services ordered in the claims in question.

The hospital system took immediate steps to improve its billing practices, said Timothy Goldfarb, CEO of Shands HealthCare based in Gainesville, Fla. “We proactively initiated an independent audit that identified some opportunities to improve billing processes at Shands,” he said in the release. “The case in question does not involve the failure to provide high-quality patient care, but rather inconsistent billing processes.”

Among the changes that Shands made, the hospital improved its case management and utilization review processes, updated software and used physician advisors to assess coding. “… our intent and practice has always been to comply with government regulations,” he said in the release.

[See also: Omnicare to settle whistle-blower lawsuit alleging kickback scheme]

The claims that were settled are allegations only, with no determination of liability, the DOJ noted. 

The settlement was the result of coordination among the U.S. Attorney’s Office for the Middle District of Florida, the Commercial Litigation Branch of the Justice Department’s Civil Division, the Department of Health and Human ServicesOffice of Inspector General and Office of Counsel to the Inspector General and the Florida Attorney General’s Office. 

The lawsuit is United States of America and the State of Florida ex rel. Terry L. Myers v. Shands Healthcare et al., Civil Action No. 3:08-cv-441-J-16HTS (M.D. Fla.).