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$15 Million False Claims Act Settlement

False Claims Act | SEC Whistleblower Claim

Sixteen Hospitals Violate False Claims Act to the Tune of $15.69 Million

According to the US Justice Department, 16 hospitals across the country will repay the federal government nearly $15.79 million for claims submitted to Medicare for services deemed unreasonable or unnecessary. This is one of the largest violations of the False Claims Act to date.

The Involved Hospitals

Health Management Associates Inc., or HMA, owns and operates 14 of the involved hospitals. They include Central Mississippi Medical Center, Crossgate River Oaks (Mississippi), Dallas Regional Medical Center (Texas), Davis Regional Medical Center (North Carolina), East Georgia Regional Medical Center, Gilmore Regional Medical Center (Mississippi), Lake Norman Regional Medical Center (North Carolina), Lehigh Regional Medical Center (Florida), Medical Center of Southeastern Oklahoma, Natchez Community Hospital (Mississippi), Santa Rosa Medical Center (Florida), Southwest Regional Medical Center (Arkansas), and Summit Medical Center (Arkansas). Between the 14 hospitals, a payment of $15 million will reimburse the federal Medicare program. Wesley Medical Center in Mississippi will pay $210,000, and North Texas Medical Center will round out the rest with a payment of $480,000.

The Allegations

Between the years of 2015 and 2013, the 16 above hospitals allegedly billed Medicare for Intensive Outpatient Psychotherapy, or IOP services, which are programs designed to treat individuals with serious mental disorders, that they knew were not billable. According to the claim, these hospitals billed Medicare for unqualified IOP services. According to current law, hospitals may only bill Medicare for services under certain conditions. In this case, the patients’ conditions did not qualify for IOP, staff failed to track patients’ progress properly, the patients did not receive the right level of treatment, or individualized treatment plans were not the first course of action as per Medicare’s guidelines.

The Impact on Consumers

With millions of dollars lost each year due to false and fraudulent claims like these, it is no wonder that the costs of healthcare continue to spiral out of control. Millions of people in the US rely on Medicare, a program for senior citizens and the disabled, to help them cover the enormous costs of healthcare. Due to false claims like these, the costs of healthcare are on the rise and Medicare covers less than ever before. Seniors and disabled persons who are already struggling to make ends meet must purchase expensive supplementary plans and pay exorbitant prices for many lifesaving prescription medications.

Whether the 16 hospitals above knew they were committing fraud when they submitted the claims remains unknown. However, one thing is certain: hospitals and medical centers like these need stricter guidelines for claims submissions. The Medicare program’s guidelines are indeed difficult to follow at times, but doing could save consumers tens of millions of dollars every year on the cost of insurance premiums alone.

Tennessee Hospital Medicaid Fraud

A recent judgement against Jackson-Madison County General Hospital in Jackson, Tennessee means that the hospital will pay $1,328,465 to make up for improperly billing Medicaid and Medicare for the placement of unnecessary cardiac devices. The whistleblower in the case, Dr. Wood D. Deming, received a share of the settlement.

The Hospital’s False Claims

From January 2004 to December 2011, Jackson-Madison County General Hospital performed dozens of unnecessary cardiac procedures on patients for the sole purpose of collecting payments from Medicaid and Medicare. Federal law only allows hospitals reimbursement for medically necessary procedures. According to Edward L. Stanton III, the United States Attorney for the Western District of Tennessee, “Billing Medicare for cardiac procedures that are not necessary or inappropriate contributes to the soaring costs of health care and harms patients.”

Blowing the Whistle

Dr. Wood D. Deming raised the allegations under the qui tam (whistleblower) provisions of the False claims Act, which allows private citizens with knowledge of fraud to act on behalf of the government and share in the recovery. As such, Dr. Deming is entitled to his share of the settlement amount, which topped out at well over one million dollars. However, at this time, the claims are only allegations and liability has not yet been determined.

Improper Placement of Stents and Cardiac Procedures

The hospital’s allegations include improperly and unnecessarily placing stents, performing angioplasties and catheterizations, and using expensive ultrasound imaging when no medical need existed. This not only helped the hospital rack up costs that Medicaid and Medicare would later reimbursed, but it also put dozens of patients in danger. Unnecessary medical procedures carry risks of infection and bleeding, so the hospital exposed these patients to a host of unnecessary risks all in the name of corporate greed, according to Dr. Deming’s claim.

Understanding Cardiac Stents

A cardiac stent is a mesh tube surgically placed inside of the coronary arteries to keep them open. Often, in coronary artery disease, a coating of plaque lines the arterial walls, which presents a great risk for heart attacks and other complications. Not all patients with coronary artery disease require stents, however, but the Jackson-Madison County General Hospital placed them in patients when no medical need existed. Often, these procedures were followed or preceded by angioplasty (balloons placed inside the arteries), catheterization, and various types of imaging. This is a very invasive procedure, and one that many patients at the hospital just did not need, according to the whistleblower.

Patients already experience a great deal of anxiety and distress when dealing with heart problems like coronary artery disease. They should not have to worry about the competency of their doctors and health professionals. Thanks to whistleblowers like Dr. Deming, cardic patients at Jackson-Madison County General Hospital can breathe a sigh of relief.

*Bothwell Law Group did not represent any parties in this case.

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