The following lawsuits were filed or announced in the past month.
1. OIG: Cleveland Clinic Received Nearly $254k in Medicare Overpayments
A federal review has found Cleveland Clinic was overpaid approximately $254,000 for 24 Medicare claims from 2008-2009. The report says Cleveland Clinic did not fully comply with Medicare requirements to obtain credits available from manufacturers. Credits pertain to medical device replacements. When a device needs to be replaced, providers may receive full or partial credit from the manufacturers of devices that are covered under warranty or replaced because of recalls. To offset these credits, Medicare can reduce the payment for a replacement device if the provider receives full or partial credit. For 24 processed claims, credits were available from device manufacturers, but Cleveland Clinic either did not obtain them or did not report them.
2. Whistleblower Claims Florida's Boca Raton Regional Hospital Bilked Medicare
A whistleblower has accused Boca Raton (Fla.) Regional Hospital of intentionally overbilling Medicare by at least $2 million. In the suit, former hospital employee Jeannette Lavoie claims BRRH administrators purposely used the wrong billing codes and submitted more than 600 fraudulent claims from July 2006-Jan. 2008. The estimated total overbilling has ranged from $8 million to $2 million. The whistleblower's attorney says this figure will "become clear as the hospital turns over records," according to the report.
3. New Milford Hospital in Connecticut Settles Overbilling Charges
New Milford (Conn.) Hospital has agreed to pay the federal government approximately $472,000 to resolve a complaint that it overbilled Medicare for prostate cancer treatments. The incidents involved the drug Lupron, which is administered by injection. Different doses are required for male and female patients. The billing code for female-related dosages has a higher reimbursement rate. HHS claimed NMH regularly used the female codes when seeking reimbursement for male patients from 2001-2009.
4. Justice Dept. Files Suit Against Florida's Halifax Health Alleging Improper Relationships
The Justice Department filed a suit last week in Orlando federal court against Daytona Beach, Fla.-based Halifax Health alleging the health system violated the anti-kickback law in financial arrangements with physicians and submitted false claims as a result. The Justice Department announced in September it would join a whistleblower suit against the health system filed by the hospital's director of physician services in 2009. The suit claims contracts with three neurosurgeons and seven medical oncologists were improper, in part, because they either paid these physicians more than fair market value, were not commercially reasonable or took into consideration the volume or value of the physicians' referrals.
5. Congressman Requests Federal Investigations Into Prime Healthcare
Representative Bob Filner (D-Calif.) has asked federal officials to investigate Ontario, Calif.-based Prime Healthcare Services for possible "systematic fraud." Rep. Filner sent letters to the Office of the Inspector General and the Internal Revenue Service. Both of the representative's requests mention prior California Watch reports about Prime's Medicare billing and patient admission practices, as well as the health system owner's involvement in charities with which he is a stakeholder.
6. Kentucky's Jewish Hospital Settles Charges of Improper Medicare Billing
Jewish Hospital & St. Mary's HealthCare in Louisville, Ky., has agreed to pay $435,502 to settle claims that it overbilled Medicare from 2006-2010. Federal officials contended that JHSMH improperly charged Medicare for outpatient wound-care services. The suit claimed JHSMH submitted charges for separate evaluation and management services that were never performed.
7. Audit Finds Billing Errors at St. John's Hospital in Missouri
A federal audit has found St. John's Hospital in Springfield and Joplin, Mo., did not fully comply with Medicare billing requirements for selected inpatient and outpatient claims. Of 224 sample claims, 58 had errors that resulted in net overpayments totaling $420,410 from 2008-2010. An HHS report says the errors occurred primarily because the 866-bed hospital lacked the "adequate controls to prevent incorrect billing" and did not fully understand billing requirements. The government recommended the hospital refund $420,410 to Medicare and strengthen controls to ensure full compliance with Medicare requirements.
8. Whistleblower Accuses Wyoming Medical Center of Altering Records, False Claims
A whistleblower claims Wyoming Medical Center in Casper defrauded Medicare and Medicaid by tweaking patient records to collect higher reimbursements. The federal qui tam suit was filed by a hospital worker, Gale Bryden, in 2007, but was unsealed this week. It claims the hospital's records clerks changed patients' admission statuses from outpatient to inpatient without physicians' orders. The changes allegedly resulted in increased charges ranging from $35-$1,100. The hospital's attorney has denied any attempt by the hospital to defraud the government or payors and said any mistakes were inadvertent or accidental.
9. HMA Subpoenas May Involve Anti-Kickback, False Claims Violations
Health Management Associates, based in Naples, Fla., has said two government subpoenas it received apply to the company's entire system and may involve alleged anti-kickback and False Claims Act violations. The subpoenas were issued by the U.S. Department of Health and Humans Services' Office of Inspector General in August. One requested information on physician referrals and management at HMA's "whole-hospital physician joint ventures." The second requested information on emergency department management and the use of Pro-Med software. HMA said it is cooperating with the ongoing investigations.
10. Kernan Hospital in Baltimore Allegedly Overbilled Medicare for Malnutrition
The federal government has filed a suit against Kernan Hospital, an orthopedic and rehabilitation hospital in Baltimore, over allegations that it improperly billed Medicare and Medicaid for a severe form of malnutrition. The suit claims the hospital falsely manipulated its billing system to make it seem as though patients had kwashiorkor when medical evidence did not support that diagnosis. A spokesperson for the University of Maryland Medical System, which owns Kernan, has said the system does not agree with the government's charges.
11. Kentucky's Pikeville Medical Center Settles Medicare Overbilling Charges
Pikeville (Ky.) Medical Center has settled a whistleblower lawsuit with the federal government alleging that it improperly billed Medicare for work done in its pain management clinic. Whistleblower Michael Fletcher, MD, filed the suit accusing the hospital of overbilling Medicare from 2005-2007 for services in its pain management, radiation oncology and medical oncology units. Pikeville did not admit any wrongdoing and paid $36,138 to settle the allegations.
13 Legal Issues for Hospitals and Health Systems
9 Key Legal Developments Facing Hospitals
1. OIG: Cleveland Clinic Received Nearly $254k in Medicare Overpayments
A federal review has found Cleveland Clinic was overpaid approximately $254,000 for 24 Medicare claims from 2008-2009. The report says Cleveland Clinic did not fully comply with Medicare requirements to obtain credits available from manufacturers. Credits pertain to medical device replacements. When a device needs to be replaced, providers may receive full or partial credit from the manufacturers of devices that are covered under warranty or replaced because of recalls. To offset these credits, Medicare can reduce the payment for a replacement device if the provider receives full or partial credit. For 24 processed claims, credits were available from device manufacturers, but Cleveland Clinic either did not obtain them or did not report them.
2. Whistleblower Claims Florida's Boca Raton Regional Hospital Bilked Medicare
A whistleblower has accused Boca Raton (Fla.) Regional Hospital of intentionally overbilling Medicare by at least $2 million. In the suit, former hospital employee Jeannette Lavoie claims BRRH administrators purposely used the wrong billing codes and submitted more than 600 fraudulent claims from July 2006-Jan. 2008. The estimated total overbilling has ranged from $8 million to $2 million. The whistleblower's attorney says this figure will "become clear as the hospital turns over records," according to the report.
3. New Milford Hospital in Connecticut Settles Overbilling Charges
New Milford (Conn.) Hospital has agreed to pay the federal government approximately $472,000 to resolve a complaint that it overbilled Medicare for prostate cancer treatments. The incidents involved the drug Lupron, which is administered by injection. Different doses are required for male and female patients. The billing code for female-related dosages has a higher reimbursement rate. HHS claimed NMH regularly used the female codes when seeking reimbursement for male patients from 2001-2009.
4. Justice Dept. Files Suit Against Florida's Halifax Health Alleging Improper Relationships
The Justice Department filed a suit last week in Orlando federal court against Daytona Beach, Fla.-based Halifax Health alleging the health system violated the anti-kickback law in financial arrangements with physicians and submitted false claims as a result. The Justice Department announced in September it would join a whistleblower suit against the health system filed by the hospital's director of physician services in 2009. The suit claims contracts with three neurosurgeons and seven medical oncologists were improper, in part, because they either paid these physicians more than fair market value, were not commercially reasonable or took into consideration the volume or value of the physicians' referrals.
5. Congressman Requests Federal Investigations Into Prime Healthcare
Representative Bob Filner (D-Calif.) has asked federal officials to investigate Ontario, Calif.-based Prime Healthcare Services for possible "systematic fraud." Rep. Filner sent letters to the Office of the Inspector General and the Internal Revenue Service. Both of the representative's requests mention prior California Watch reports about Prime's Medicare billing and patient admission practices, as well as the health system owner's involvement in charities with which he is a stakeholder.
6. Kentucky's Jewish Hospital Settles Charges of Improper Medicare Billing
Jewish Hospital & St. Mary's HealthCare in Louisville, Ky., has agreed to pay $435,502 to settle claims that it overbilled Medicare from 2006-2010. Federal officials contended that JHSMH improperly charged Medicare for outpatient wound-care services. The suit claimed JHSMH submitted charges for separate evaluation and management services that were never performed.
7. Audit Finds Billing Errors at St. John's Hospital in Missouri
A federal audit has found St. John's Hospital in Springfield and Joplin, Mo., did not fully comply with Medicare billing requirements for selected inpatient and outpatient claims. Of 224 sample claims, 58 had errors that resulted in net overpayments totaling $420,410 from 2008-2010. An HHS report says the errors occurred primarily because the 866-bed hospital lacked the "adequate controls to prevent incorrect billing" and did not fully understand billing requirements. The government recommended the hospital refund $420,410 to Medicare and strengthen controls to ensure full compliance with Medicare requirements.
8. Whistleblower Accuses Wyoming Medical Center of Altering Records, False Claims
A whistleblower claims Wyoming Medical Center in Casper defrauded Medicare and Medicaid by tweaking patient records to collect higher reimbursements. The federal qui tam suit was filed by a hospital worker, Gale Bryden, in 2007, but was unsealed this week. It claims the hospital's records clerks changed patients' admission statuses from outpatient to inpatient without physicians' orders. The changes allegedly resulted in increased charges ranging from $35-$1,100. The hospital's attorney has denied any attempt by the hospital to defraud the government or payors and said any mistakes were inadvertent or accidental.
9. HMA Subpoenas May Involve Anti-Kickback, False Claims Violations
Health Management Associates, based in Naples, Fla., has said two government subpoenas it received apply to the company's entire system and may involve alleged anti-kickback and False Claims Act violations. The subpoenas were issued by the U.S. Department of Health and Humans Services' Office of Inspector General in August. One requested information on physician referrals and management at HMA's "whole-hospital physician joint ventures." The second requested information on emergency department management and the use of Pro-Med software. HMA said it is cooperating with the ongoing investigations.
10. Kernan Hospital in Baltimore Allegedly Overbilled Medicare for Malnutrition
The federal government has filed a suit against Kernan Hospital, an orthopedic and rehabilitation hospital in Baltimore, over allegations that it improperly billed Medicare and Medicaid for a severe form of malnutrition. The suit claims the hospital falsely manipulated its billing system to make it seem as though patients had kwashiorkor when medical evidence did not support that diagnosis. A spokesperson for the University of Maryland Medical System, which owns Kernan, has said the system does not agree with the government's charges.
11. Kentucky's Pikeville Medical Center Settles Medicare Overbilling Charges
Pikeville (Ky.) Medical Center has settled a whistleblower lawsuit with the federal government alleging that it improperly billed Medicare for work done in its pain management clinic. Whistleblower Michael Fletcher, MD, filed the suit accusing the hospital of overbilling Medicare from 2005-2007 for services in its pain management, radiation oncology and medical oncology units. Pikeville did not admit any wrongdoing and paid $36,138 to settle the allegations.
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8 Recent Lawsuits Involving Hospitals13 Legal Issues for Hospitals and Health Systems
9 Key Legal Developments Facing Hospitals