32 hospitals to pay $28M in spine surgery false claims settlement: 5 things to know

Written by Anuja Vaidya | December 21, 2015 | Print  |

Thirty-two hospitals — including Cleveland Clinic, Tenet Health Care in Dallas and Community Health Systems in Franklin, Tenn. — will pay $28 million to settle False Claims Act allegations related to spine surgery, according to the U.S. Department of Justice.

Here are five things to know:


1. Allegedly, the 32 facilities submitted false claims to Medicare for minimally invasive kyphoplasty procedures. Kyphon developed the kyphoplasty procedure performed at these hospitals.


2. The allegations note for kyphoplasty procedures the hospitals frequently billed Medicare on an inpatient basis rather than an outpatient basis. The inpatient procedures pay more but are also more costly; outpatient procedures are less costly and reimburse at a lower rate.


3. All but three of the settling facilities were named as defendants in a qui tam lawsuit. The government also settled with Medtronic Spine, Kyphon's corporate successor, to settle allegations that the company counseled hospital providers to perform kyphoplasty as inpatient procedures instead of outpatient procedures.


4. The DOJ has now reached settlements with more than 130 hospitals to resolve allegations that they submitted false claims for kyphoplasty procedures. The settlements total around $150 million.


5. Cleveland Clinic paid $1.74 million; five Tenet Health Care hospitals paid $2.2 million and five Community Health Systems hospitals paid $2.5 million. The 32 hospitals include Tampa (Fla.) General Hospital which paid $2 million, Banner Boswell Medical Center in Sun City, Ariz., which paid $2.6 million, MultiCare Tacoma (Wash.) General Hospital which paid $983,000 and Spartanburg (S.C.) Regional Health Services District which paid $1.7 million.


"Charging the government for higher cost inpatient services that patients do not need wastes the country's vital healthcare dollars," said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. "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 to maximize hospital profits."


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