Corporate Compliance

Three MN hospitals agree to pay $2.28M to settle false claims case

Compliance Monitor, May 27, 2009

St. Joseph’s Hospital, St. John’s Hospital, and Woodwinds Hospital—all based in Minnesota— agreed to pay $2.28 million to settle allegations that the hospitals performed a minimally invasive outpatient procedure as an inpatient procedure in order to receive higher reimbursement from Medicare, according to a Department of Justice release.
According the Department of Justice, the three hospitals—all part of the HealthEast Care System—allegedly performed kyphoplasty procedures as inpatient procedures when they could have performed them as outpatient procedures. Keeping kyphoplasty patients overnight significantly increased hospital profits for the procedure.
The hospitals discovered the overbilling mistake prior to the case and paid $1.45 million to the government following an internal audit. That total has been credited to the $2.28 million settlement.
The government reached a settlement in a similar case last year. In May 2008, Medtronic Spine LLC, corporate successor to Kyphon Inc, paid $75 million to settle allegations that the company advised hospitals to perform kyphoplasty procedures in the inpatient setting.

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