Fraudulent Medical Billing

Hospitals Pay to Settle Inflated Billing Lawsuit

Robert was shocked, as he read the news regarding the settlements made by the hospitals, for incorrect Kyphoplasty procedures.  He clearly remembered that day, when his mom had to undergo the same procedure, way back in 2006.  Although active and otherwise healthy, his mom suffered from osteoporosis since the last three years.  Last week, she slipped in the kitchen and felt a sharp pain in her lower back.  Examination and X-rays revealed that she had fractured her spine, weakened as it was due to her osteoporosis.  The doctor advised that she would have to undergo Kyphoplasty and hence should be admitted to the hospital for the procedure.  Keeping in mind that his mom was 65 years old, Robert agreed and had her admitted to the hospital immediately.  The next day, his mom went through the procedure and two days later was discharged from the hospital.  Fortunately, being covered under medical insurance, the bill for the procedure and hospital stay was taken care of by Medicare.

The US Justice Department recently announced that another 32 hospitals have agreed to pay $28 million, to settle allegations of inflating their Medicare billing, by making patients undergo kyphoplasty procedures as inpatients, when they could have undergone the procedure as outpatients.  With these 32 hospitals, the number of hospitals across the country, that have settled the case now exceeds 130, with the settlement amount reaching $105 million.

A minimally invasive procedure, kyphoplasty is used to treat spinal fractures.  It involves using an inflatable balloon to create a cavity inside a compressed vertebra, which is then filled with cement to strengthen the bone.  According to the government, there is no need for a patient to be admitted to a hospital for this procedure, as it can be effectively and safely performed on an outpatient basis.  However, hospitals encouraged patients to get admitted for the procedure and thus inflated their medical bills.

Craig Patrick and Charles Bates, former employees, filed a whistle-blower lawsuit in 2008, alleging that Kyphon, an equipment maker and their former employee, encouraged hospitals to admit patients for this procedure, as it would help pay for the kits and bring in more cash for the hospitals at the same time.

Spanning 15 states, the 32 hospitals in the latest round of settlements include the Cleveland Clinic, 5 hospitals affiliated with Community Health Systems, 5 hospitals formerly owned and operated by Health management Associates and 5 hospitals affiliated with Tenet Healthcare Corp.  Medtronic Spine, the corporate successor to Kyphon, has already settled with the government for $75 million.  Other than three, the remaining 29 hospitals in this settlement were all named as defendants in the lawsuit.  According to the Justice Department, the settlements do not include any determinations of liability.

According to Tim McCormack, these 32 settlements are not expected to be the last in this case.  ()  Tim, who represented the whistle-blowers earlier and now a partner at Constantine Cannon, applauded the Justice Department for pursuing hospitals even after a settlement had been reached with the company and for sticking with the case for so long.  “The Department of Justice recognizes that to truly reign in corrupt behavior, you can’t just look at a company that’s pushing it or consultants that are pushing it. You have to look at who’s benefiting, at hospitals that are benefiting,” McCormack said. “Deterrence is not going to be very effective if you don’t hold the hospitals accountable.”

The Cleveland Clinic said in statement that it fully cooperated with the review and stated, “It is important to note that all of the surgeries performed at our institution were deemed medically necessary and benefitted our patients.”

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