Justice: Hospitals to pay $34 million in Medicare payment fraud settlement

  • Posted: Wednesday, July 3, 2013 1:17 a.m.

ST. LOUIS — Fifty-five hospitals in 21 states have agreed to pay $34 million to the U.S. government to settle allegations that they used more expensive inpatient procedures rather than outpatient spinal surgeries to get bigger payments from Medicare, the U.S. Justice Department said Tuesday.

The settlement involves kyphoplasty procedures used to treat spinal fractures usually caused by osteoporosis. It can be done as an outpatient procedure, but he Justice Department said the hospitals performed the surgeries as inpatient procedures to increase Medicare billings.


“Hospitals that participate in the Medicare program must bill for their services accurately and honestly,” Stuart F. Delery, acting Assistant Attorney General for the civil division of the Justice Department, said in a statement.

A similar settlement was reached last year, when 14 hospitals agreed to pay a settlement of more than $12 million. And in 2008, the Justice Department agreed to a $75 million settlement with Medtronic Inc.’s spine business. The government was investigating allegations that Kyphon, a company that had been acquired by Medtronic Spine in 2007, advised hospitals to do inpatient kyphoplasties to bulk up their Medicare payments.

In the latest settlement, the largest payments are being made by Atrium Medical Center of Middletown, Ohio, which will pay $4.2 million; Mount Sinai Medical Center in Miami, $1.8 million; Altru Health System of Grand Forks, N.D., $1.5 million; Cedars Sinai Medical Center in Los Angeles, $1.5 million; Wayne Memorial Hospital in Goldsboro, N.C., $1.3 million; Trover Health System of Madisonville, Ky., $1.2 million; The Queen’s Medical Center in Honolulu, $1.1 million; and Des Peres Hospital in suburban St. Louis, $900,000.

Several multi-hospital organizations agreed to settlements, including:

—Twenty-three hospitals with HCA Inc. of Nashville, Tenn., paying a total of $7.1 million.

—Six hospitals with Lifepoint Hospitals Inc. of Brentwood, Tenn., $2.5 million.

—Five hospitals with Trinity Health of Livonia, Mich., $3.9 million.

—Four hospitals with Morton Plant Mease BayCare Health System of Clearwater, Fla., $2.4 million.

—Three hospitals with Baptist Memorial Hospital-Golden Triangle of North Columbus, Miss., $1.8 million.

—Two hospitals with Bayhealth Medical Center of Newark, Del., $1.1 million.

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