Hospitals have long been recognized as vulnerable to fraud, waste, and abuse. In 2015 alone, hospital fraud accounted for nearly $330 million in settlements and judgments for a variety of schemes and abuses against the government healthcare system. Fraud in the hospital setting can take many forms, including:
- Billing for procedures and services not provided
- Billing for services and procedures not medically necessary
- Violations of the physician self-referral or Stark Law
- Admitting patients to the hospital when they could be treated on an outpatient basis
- Upcoding [link to upcoding] lower cost services and procedures for higher ones
Whistleblower Cases Involving Hospital Fraud
Hospital fraud is often actionable under the False Claims Act [link]. There are dozens of recent examples of cases and settlements in which whistleblowers alleged fraud in the hospital setting.
- In one of the largest cases involving hospital fraud, a cardiac nurse and a health care reimbursement consultant filed a whistleblower suit alleging hundreds of hospitals were fraudulently implanting cardiac devices in Medicare patients. According to the lawsuit, hospitals implanted these devices contrary to criteria established by the Centers for Medicare and Medicaid Services. The DOJ settled with nearly 500 of these hospitals for a total of $250 million.
- Several settlements last year involved violations of the Stark Law. In one case, Tuomey Regional Medical Center and Tuomey Healthcare System agreed to pay more than $72 million to settle allegations of fraud raised in a whistleblower suit. The complaint alleged Tuomey required physicians to refer their outpatient procedures to Tuomey and, in exchange, paid them compensation that unlawfully took into account the volume or value of their referrals to the hospital, and far exceeded fair market value.
- Also last year, Dignity Health agreed to pay $36.7 million to settle civil allegations that 13 of its hospitals knowingly submitted false claims to Medicare by admitting patients who could have been treated on a less costly, outpatient basis. Specifically, the government alleged that certain Dignity hospitals billed the government for inpatient care for certain patients who underwent elective cardiovascular procedures and elective, minimally-invasive kyphoplasty procedures where admission as an inpatient was medically unnecessary.
To find out more about whether a particular type of fraud is covered by the False Claims Act, contact us today.