Corporate Compliance

Rex Healthcare to pay $1.9M to settle fraud claims

Compliance Monitor, April 13, 2011

Rex Healthcare in Raleigh, NC has been ordered to pay the federal government $1.9 million, plus interest, to settle whistleblower allegations that its flagship hospital submitted false claims to Medicare to get pricier inpatient reimbursements for kyphoplasties and other minimally invasive procedures, the Justice Department announced last week.

The allegations arose from a whistleblower lawsuit filed in 2008 in federal court in Buffalo, NY, by Craig Patrick and Charles Bates, former employees of the medical device company Kyphon. The two men will receive a total of $80,000 of the settlement proceeds for kyphoplasty-related claims, DOJ said.

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