Hospitals Pay $34k to Settle False Medicare Claims

Fifty-five hospitals located throughout twenty-one states have agreed to pay the United States a total of more than $34 million to settle allegations that the health care facilities submitted false claims to Medicare for kyphoplasty procedures, the Justice Department announced today.


Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures.

In the procedure the doctor first inflates a balloonlike device in the bone to make space. The space is then filled with a cement like material to make it more stable.


A person may need a kyphoplasty if he or she has certain types of fractures in the spine. In most cases, osteoporosis—or thinning of the bones—plays a role in these fractures. The fractures cause the bones to collapse or become compressed. The fractures can cause pain or lead you to develop a hunched-over posture.


In many cases, kyphoplasty can be performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission. The settlements resolve allegations that the settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings.


“Hospitals that participate in the Medicare program must bill for their services accurately and honestly,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “The Department of Justice is committed to ensuring that Medicare funds are expended appropriately, based on the medical needs of patients rather than the desire of medical providers to maximize profits.”


The settling facilities, and the amounts they agreed to pay are specifically listed in the Department of Justice Announcement (see link below).


“This office will continue to ensure that sound medical decisions determine the ultimate treatment of a patient, not the financial interests of hospitals,” said U.S. Attorney William J. Hochul, Western District of New York. “We will not stand by and allow hospitals to inflate their profits based on unnecessary hospital admissions at the expense of the Medicare program or any other federal program. The settlements announced today will help maintain the integrity of this important program and all government-funded programs.”


“Whenever hospitals knowingly overcharge Medicare, critically needed resources are wasted and health costs are driven up,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. “When taxpayers’ dollars are threatened, OIG and its federal partners will take action.”


The Justice Department has now reached settlements with more than 100 hospitals totaling approximately $75 million to resolve allegations that they mischarged Medicare for kyphoplasty procedures. In addition to today’s settlement, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.


All but four of the settling facilities announced today were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in Buffalo, N.Y., by a former reimbursement manager for Kyphon, and a former regional sales manager for Kyphon in Birmingham, Ala. The whistleblowers will receive a total of approximately $5.5 million from the settlements announced today.


See the DOJ Announcement