Corporate Compliance

Hospital pays $3.6 million to settle upcoding allegations

Compliance Monitor, July 27, 2005

A California healthcare provider has paid $3.6 million to settle allegations that it routinely upcoded Medicare claims for pneumonia treatments and other services.

Simi Valley Hospital and Health Care Services in Los Angeles paid the settlement on July 19, but did not admit to wrongdoing.

"Upcoding" means submitting claims for more intensive or sophisticated levels of service than what was actually documented in a patients' Medicare record, according to a statement by the U.S. Department of Justice.

The Department of Health and Human Services found evidence that from 1993 though 1998, Simi Valley Hospital routinely classified pneumonia cases as "severe respiratory infections" a more serious form of pneumonia than was actually treated. The investigation also found questionable billing practices related to claims for respiratory problems and septicemia, a life threatening form of blood poisoning.

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