Health Information Management

Pediatric Services of America pays $7 million in historic settlement with OIG

HIM-HIPAA Insider, August 10, 2015

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by John Castelluccio, Editor
Georgia-based Pediatric Services of America and several of its related entities, known collectively as PSA, entered into a $7 million settlement agreement with the OIG to resolve False Claims allegations in 20 states.
This is a historic case, according to the U.S. Attorney’s Office for the Southern District of Georgia. It’s the first settlement under the False Claims Act involving a healthcare provider’s failure to investigate credit balances on its books to determine whether they resulted from overpayments made by a federal healthcare program.
The Affordable Care Act requires providers to report and return any overpayments within 60 days after they were identified or by the date any corresponding cost report was due, if applicable.
In some cases, these financial discrepancies existed for several years until two whistle-blowers at PSA alerted the OIG, according to the U.S. Attorney’s Office. Whistle-blowers Yvette Odumosu and Sheila McCray will receive a $1.1 million share of the settlement.
U.S. Attorney Edward Tarver released details of the settlement August 4, which was followed up by similar announcements from justice officials in the affected states.
Government investigators claimed the revenue was due to overpayments in connection with PSA failing to properly document submitted claims for home nursing care and overstating provided nursing services that led to the overbilling.
Authorities said PSA wrote off and absorbed credit balances that resulted from overpayments into its revenue because it had not investigated the reason for the credit balances. At the request of federal investigators, PSA cooperated with a joint audit of the credit balances on its books.
The entities involved are Pediatric Services of America Healthcare, Pediatric Services of America Inc., Pediatric Healthcare Inc., Pediatric Home Nursing Services, and Portfolio Logic LLC, which all provide home nursing services to medically fragile children.
PSA explained in a statement, however, that the inaccurate payments were due to a software glitch, according to a report by the Gwinnett Daily Post.
PSA fully cooperated with investigators and identified an internal billing error that originated with a software upgrade in 2008, causing .08% of claims to be billed incorrectly, according to the statement.
PSA said it invests heavily in compliance and will continue to allocate additional resources to its compliance program.

As part of the settlement, PSA will also enter into a corporate integrity agreement with the OIG that will require the company to put in place procedures and reviews to prevent this from happening again.

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