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Fifty-Five Hospitals to Pay U.s. More Than $34 Million to Resolve False Claims Act Allegations Related to Kyphoplasty

Fifty-five hospitals located throughout twenty-one states have agreed to pay the United States a total of more than $34 million to settle allegations that the health care facilities submitted false claims to Medicare for kyphoplasty procedures, the Justice Department announced today. Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis.

In many cases, kyphoplasty can be performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission. The settlements announced today resolve allegations that the settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings.

“Hospitals that participate in the Medicare program must bill for their services accurately and honestly,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “The Department of Justice is committed to ensuring that Medicare funds are expended appropriately, based on the medical needs of patients rather than the desire of medical providers to maximize profits.”

The settling facilities, and the amounts they have agreed to pay, include the following:

• Atrium Medical Center, Middletown, OH, has agreed to pay $4,232,992.50.
• Altru Health System, Grand Forks, ND, has agreed to pay $1,492,690.
• Cedars Sinai Medical Center, Los Angeles, CA, has agreed to pay $1,485,846.
• Des Peres Hospital, St. Louis, MO, has agreed to pay $900,000.
• Mount Sinai Medical Center, Miami, FL, has agreed to pay $1,846,194.00.
• New England Baptist Hospital, Boston, MA, has agreed to pay $374,814.48.
• St. Anne’s Hospital, Fall River, MA, has agreed to pay $552,745.
• The Queen’s Medical Center, Honolulu, HI, has agreed to pay $1,055,249.57.
• Trover Health System, Madisonville, KY, has agreed to pay $1,162,837.
• Wayne Memorial Hospital, Goldsboro, NC, has agreed to pay $1,250,000.
• Twenty-three hospitals affiliated with HCA Inc., Nashville, TN, have agreed to pay a total of $7,145,842.72. These include: Aventura Hospital & Medical Center (Aventura, FL); Capital Regional Medical Center (Tallahassee, FL); Coliseum Medical Center (Macon, GA); Coliseum Northside Hospital (Macon, GA); Conroe Regional Medical Center (Conroe, TX); Denton Regional Medical Center (Denton, TX); Doctors Hospital of Sarasota (Sarasota, FL); Edmond Regional Medical Center (Edmond, OK); Fawcett Memorial Hospital (Port Charlotte, FL); Fort Walton Beach Medical Center (Fort Walton Beach, FL); Garden Park Medical Center (Gulf Port, MS); JFK Medical Center (Atlantis, FL); Los Robles Regional Medical Center (Thousand Oaks, CA); North Florida Regional Medical Center (Gainesville, FL); Northlake Medical Center (Tucker, GA); Oklahoma University Medical Center (Oklahoma City, OK); Palmyra Medical Center (Albany, GA); Redmond Regional Medical Center (Rome, GA); Southwest Florida Regional Medical Center (Fort Myers, FL); St. Lucie Medical Center (Port Saint Lucie, FL); Summit Medical Center (Hermitage, TN); Sunrise Hospital & Medical Center (Las Vegas, NV); and Wesley Medical Center (Wichita, KS).
• Six hospitals affiliated with Lifepoint Hospitals, Inc., Brentwood, TN, have agreed to pay a total of $2,522,502.69. These include: Andalusia Regional Hospital (Andalusia, AL); Jackson Purchase Medical Center (Mayfield, KY); Lake Cumberland Regional Hospital (Somerset, KY); Minden Medical Center (Minden, LA); Russellville Hospital (Russellville, AL); and Western Plains Medical Complex (Dodge City, KS).
• Five hospitals affiliated with Trinity Health, Livonia, MI, have agreed to pay a total of $3,910,017.53. These include: Mercy Medical Center – Dubuque (Dubuque, IA); Mercy Medical Center – Sioux City (Sioux City, IA); St. Joseph Mercy Hospital (Pontiac, MI); Mercy Health Partners (Muskegon, MI); and Mount Carmel New Albany Surgical Hospital (New Albany, OH).
• Four hospitals affiliated with Morton Plant Mease BayCare Health System, Clearwater, FL, have agreed to pay a total of $2,378,325.45. These include: Morton Plant Hospital (Clearwater, FL); Morton Plant North Bay Hospital (New Port Richey, FL); Mease Dunedin Hospital (Dunedin, FL); and Mease Countryside Hospital (Safety Harbor, FL).
• Three hospitals affiliated with Baptist Memorial Health Care Corporation, Memphis, TN, have agreed to pay a total of $691,168. These include: Baptist Memorial Hospital-Golden Triangle (North Columbus, MS); Baptist Memorial Hospital-Collierville (Collierville, TN); and Baptist Memorial Hospital-Memphis (Memphis, TN).
• Two hospitals affiliated with Covenant Health, Knoxville, TN, have agreed to pay a total of $1,845,641.74. These include Parkwest Medical Center (Knoxville, TN) and Methodist Medical Center of Oak Ridge (Oak Ridge, TN).
• Two Hospitals affiliated with Bayhealth Medical Center, Newark, DE, have agreed to pay a total of $1,115,306.37. These include Bayhealth Kent General Hospital (Dover, DE) and Bayhealth Milford Memorial Hospital (Milford, DE).

“This office will continue to ensure that sound medical decisions determine the ultimate treatment of a patient, not the financial interests of hospitals,” said U.S. Attorney William J. Hochul, Western District of New York. “We will not stand by and allow hospitals to inflate their profits based on unnecessary hospital admissions at the expense of the Medicare program or any other federal program. The settlements announced today will help maintain the integrity of this important program and all government-funded programs.”

“Whenever hospitals knowingly overcharge Medicare, critically needed resources are wasted and health costs are driven up,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. “When taxpayers’ dollars are threatened, OIG and its federal partners will take action.”

The Justice Department has now reached settlements with more than 100 hospitals totaling approximately $75 million to resolve allegations that they mischarged Medicare for kyphoplasty procedures. In addition to today’s settlement, the government previously settled 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.

“It has never been more important to protect the Medicare Trust Fund, and this includes ensuring that Medicare is not burdened with the high costs of medically unnecessary admissions. The Office of Inspector General will continue to ensure that the Medicare Program is protected from fraud, waste, and abuse,” said Tom O’Donnell, Special Agent in Charge of the Office of Investigations of the HHS-OIG New York Regional Office. “The settlements related to kyphoplasty billing that have been reached with over 100 hospitals represent one of the largest and most successful multi-party health care investigations in the nation.”

All but four of the settling facilities announced today were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates. Mr. Patrick is a former reimbursement manager for Kyphon, and Mr. Bates was formerly a regional sales manager for Kyphon in Birmingham, Ala. The whistleblowers will receive a total of approximately $5.5 million from the settlements announced today.

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.7 billion.

The settlements were the result of a coordinated effort 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.

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