55 Hospitals Settle Health Fraud Claims for $34M; Whistleblowers to Get $5.5M

Fifty-five hospitals located throughout the United States have agreed to pay the U.S. government over $34 million to settle allegations that the facilities knowingly submitted or caused the submission of false claims to Medicare for kyphoplasty procedures, the U.S. Department of Justice announced this week. 

Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures, often related to osteoporosis.  In many cases, kyphoplasty can be performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission.  The agreements announced today resolve allegations that the settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings.   

A sampling of the hospitals involved, and the amounts they settled for, include:

• Atrium Medical Center, Middletown, Ohio: $4,232,992.50.
• Cedars Sinai Medical Center, Los Angeles, Calif.: $1,485,846.
• Mount Sinai Medical Center, Miami, Fla.: $1,846,194.00.
• Twenty-three hospitals affiliated with HCA Inc., Nashville, Tenn.: $7,145,842.72 (including hospitals located in Florida, Texas, California, Georgia, and more).

The Justice Department has now reached settlements totaling approximately $75 million, with over 100 hospitals, to resolve allegations that they mischarged Medicare for kyphoplasty procedures. 

In addition to today’s settlement, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million, to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.

All but four of the settling facilities announced today were named as defendants in a lawsuit brought by Craig Patrick and Charles Bates, former Kyphon employees, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Patrick and Bates will receive approximately $5.5 million as their share of the settlement.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.