Banner Health has agreed to pay over $18 million to settle allegations that 12 of its hospitals in Arizona and Colorado knowingly submitted false claims to Medicare by admitting patients who could have been treated on a less costly outpatient basis. Headquartered in Arizona, Banner Health owns and operates 28 acute-care hospitals in multiple states.
“Taxpayers should not bear the burden of inpatient services that patients do not need,” said Acting Assistant Attorney General Chad A. Readler for the Justice Department’s Civil Division. “The Department will continue its efforts to stop abuses of the nation’s health care resources and to ensure that patients receive the most appropriate care.”
The settlement resolves allegations that 12 Banner Health hospitals knowingly overcharged Medicare patients unnecessarily. In particular, the United States alleged that from Nov. 1, 2007 through Dec. 31, 2016, Banner Health billed Medicare for short-stay, inpatient procedures provided at the 12 hospitals that should have been billed on a less costly outpatient basis. The settlement also resolves allegations that Banner Health inflated in reports to Medicare the number of hours for which patients received outpatient observation care during this time period.
Banner Health also entered into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office of Inspector General requiring the company to engage in significant compliance efforts over the next five years. Under the agreement, Banner Health is required to retain an independent review organization to review the accuracy of the company’s claims for services furnished to federal health care program beneficiaries.
This settlement resolves a lawsuit filed in the U.S. District Court for the District of Arizona by Cecilia Guardiola, a former employee of Banner Health, under the qui tam or whistleblower provisions of the False Claims Act. Guardiola will receive roughly $3.3 million. DOJ
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