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Overbilling to be Settled by Dignity Health for $37 M

Overbilling Claims to be Settled by Dignity Health for $37 Million

Originally posted by Bret Urgamy with Capital OTC

The three-state hospital chain based in San Francisco, Dignity Health, has agreed to settle its claims of overbilling Medicare as well as a military health care program for years. As a consequence, they will be paying the government $37 million.

Courtesy of Capital OTC

Formerly known as Catholic Healthcare West, Dignity Health had submitted bills for inpatient care at one third of its hospitals in Arizona, California and Nevada. However, according to the justice department, these bills should have been charged at less-expensive outpatient rates.

Covering elective cardiovascular surgeries for angioplasties and pacemakers, the bills as well as diagnostic procedures were paid for by Medicare and Tricare, the military health program. These bills and procedures stemmed from 13 hospitals from 2006 to 2010 (for the cardiovascular ones), however, there were also other types of surgeries covered, such as a spinal operation called kyphoplasty at four hospitals between 2000 and 2008.

The entire situation came to light because of a whistle-blower suit filed in San Francisco by Kathleen Hawkins, former Dignity Health employee, who is now going to receive $6.25 million of the settlement according to Justice Department statements

“Hospitals that attempt to boost profits by admitting patients for expensive and unnecessary inpatient hospital stays will be held accountable,”

chief of the U.S. Health and Human Services Department’s inspector general’s office in San Francisco, Ivan Negroni said.

Dignity Health, the hospital being sued for these fraudulent bills is one of the United States’ five largest hospital systems. When confronted with the suit, it admitted no wrongdoing. Their decision to settle, according to their spokespeople, was made so as to avoid the expenses of prolonged litigation.

“The billing disputes reflect widespread confusion in the health care industry on unclear federal standards for approving coverage of patient admissions. As a result, it is often challenging for physicians to ensure their documentation adequately reflects their decision-making.”

the company said.

Former federal prosecutor Marcella Auerbach accused the hospital for its practices:

“Billing Medicare for higher cost inpatient services that patients do not need is a major strain on the public fisc. The False Claims Act provides substantial whistleblower rewards to incentivize people to step forward when they uncover such billing practices.”

This settlement was obtained through the collaboration of the U.S. Justice Department and the Office of Inspector General of the U.S. Department for Health and Human Services. It involved claims that met the following criteria:

• For beneficiaries whose length of stay after inpatient admission was one (1) day or less;
• For beneficiaries whose admission did not originate in the Emergency Department.