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San Francisco-based three-state hospital chain ‘Dignity Health’ has finally agreed to reach a USD 37 million settlement for charges in a whistleblower suit in which the government has claimed that the hospital system had overbilled Medicare and a military health program.
In the case, the authorities have claimed that 13 of 39 hospitals in Arizona, California and Nevada intentionally submitted false or forge claims to Tricare and Medicare by admitting such patients who could have been given a less costly outpatient basis treatment.
The U.S. Justice Department has charged Dignity Health, earlier known as Catholic Healthcare West, for submitting false expensive bills when they could have treated the patients using cheaper outpatient rates.
Dignity Health has, however, turned down the accusations, saying “there is widespread confusion about federal standards for approving coverage of patient admissions”.
In a released statement on Thursday, the Department of Justice said former Dignity employee Kathleen Hawkins, who is the whistleblower in the case, will receive about USD 6.25 million from the hospital as the settlement amount.
According to the federal department, between 2006 and 2010 the hospitals had billed ‘Medicare’ and military health care program ‘Tricare’ for inpatient care for some patients who had undergone elective cardiovascular procedures like implanting pacemakers or stents during scheduled surgeries when the claims were liable to be billed as lower-cost outpatient surgeries.
The government further charged four of the hospitals for billng Medicare between 2000 and 2008 for beneficiaries who underwent elective kyphoplasty procedures that should have been billed as less expensive outpatient procedures.
Additionally, the 13 hospitals were found allowing unnecessary admissions in inpatient care to patients between 2008 and 2010, who were diagnosed for common medical conditions.
“Charging the government for higher-cost inpatient services that patients do not need wastes the country’s vital health care dollars. This department will continue its work to stop abuses of the nation’s health care resources and to ensure patients receive the most appropriate care,” Joyce R. Branda, acting assistant attorney general for the Justice Department’s civil division, said in the statement.
Dignity is the fifth-largest hospital system in the United States with 39 hospitals in three states.