Bloomberg News

Fourteen Hospitals Reach $12 Million False Claims Accord

February 09, 2012

(Updates with hospital statement in fifth paragraph.)

Feb. 7 (Bloomberg) -- Fourteen hospitals in New York and six other states agreed to pay more than $12 million in total to settle allegations that they submitted false claims to Medicare, the U.S. Justice Department said.

Four hospitals affiliated with Adventist Health System/Sunbelt Inc. in Florida will pay the largest sum, $3.9 million, according to an e-mailed statement today by the Justice Department. Plainview Hospital in Plainview, New York, will pay $2.3 million, the largest single hospital payment, the agency said.

The settlement resolves civil claims that the hospitals overcharged Medicare for eight years starting in 2000 for the cost of performing kyphoplasty procedures, which treat spinal fractures due to osteoporosis. In total, more than 40 hospitals have paid at least $39 million to settle such overbilling claims, the Justice Department said.

“By recovering taxpayer dollars lost to improper billing, this settlement will help support the vital public health care programs we depend on,” Assistant Attorney General Tony West said in the statement.

Plainview Hospital, which is part of the North Shore-Long Island Jewish Health System, said in a statement that the dispute concerned “technical billing allegations,” and it denied violating the law.

‘Significant Costs’

“Settlement without any admission of liability avoids the significant costs and distraction of litigation against the government,” the hospital said.

The settlements follow a 2008 whistle-blower lawsuit brought under the False Claims Act by two men who had worked for Kyphon Inc., a maker of surgical equipment. The men, a former regional sales manager and an ex-reimbursement manager, will collect a total $2.1 million from the settlements.

The U.S. False Claims Act permits whistle-blowers to sue on behalf of the government and to share in any recovery.

Kyphon’s successor company, Medtronic Spine LLC, paid $75 million in 2008 for defrauding Medicare, the Justice Department said.

Representatives of Adventist Health System didn’t immediately respond to phone calls seeking comment on the settlement.

--Editors: Peter Blumberg, Andrew Dunn

To contact the reporters on this story: Laurence Viele Davidson in Atlanta at lviele@bloomberg.net and Greg Chang at gchang1@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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