Here’s a look into three very different hospital Medicare fraud cases and what we know about federal investigations into these types of cases.
1. According to Modern Healthcare, federal officials have begun to zero in on long observation stays as “one area where they believe they can find cost savings.”
In April, Navicent Health of Macon, GA, agreed to pay the federal government $20 million to settle allegations that its flagship hospital, the Medical Center of Central Georgia, had inappropriately billed Medicare for short-term inpatient stays that should have been billed as outpatient visits. Although the hospital agreed to the settlement in order to avoid litigation, it admitted no wrongdoing, claiming that the line between short stays and outpatient visits is unclear.
“Integrity is a core value at the Medical Center of Central Georgia,” Ninfa Saunders, the system's CEO, said in the release. “We take compliance very seriously and continue to strengthen our already strong compliance policies and procedures.”
As part of the settlement, the hospital has been ordered to conduct additional employee compliance training and also hire an outside firm to conduct compliance reviews.
2. In June, Joe White, former chief financial officer of Shelby Regional Medical Center in Texas, was ordered to pay $4.5 million and sentenced to 23 months in prison after pleading guilty to receiving nearly $800,000 from CMS after lying about meaningful use of electronic health records.
According to court records, White falsely attested to meaningful use as the hospital continued to rely mostly on paper records.
"The granting of EHR funds to individual and institutional providers was intended to modernize medical record storage and access," Mike Fields, special agent in charge of the Dallas region’s HHS Office of Inspector General, said in a press release. "Unfortunately, there are individuals and institutions like Mr. White and his hospital whose only intent for EHR funds was to enrich themselves."
According to Healthcare IT News, this is not the first time the Office of the Inspector General (OIG) has called attention to the potential for fraud in the Meaningful Use EHR Incentive Program. In October 2012, OIG announced it would look at incentive payments CMS made beginning in 2011 to identify payments to providers that did not meet the meaningful use criteria.
3. In early July, a federal appeals court upheld a $237 million False Claims Act verdict against Sumter, SC-based Tuomey Healthcare System for offering kickbacks to physicians for referrals, in violation of the Stark law. Although the hospital argued the contracts were drafted with the advice of its attorneys, the court noted one attorney had raised concerns that had not been taken seriously by the hospital.
Even so, Judge Albert Diaz, who wrote the opinion, called the case “troubling.” In his opinion, Diaz said that the complexity of the Stark law makes it easy to see how even diligent attorneys might give clients incorrect advice.
According to Modern Healthcare, the American Hospital Association and South Carolina Hospital Association filed a brief on behalf of Tuomey, claiming hospitals shouldn't be penalized for relying on advice from attorneys, even if that advice turns out to be flawed.
“Permitting hospitals to be penalized in this draconian fashion for obtaining and following the advice of legal professionals will jeopardize the ability of hospitals to meet the healthcare needs of their communities, especially in rural, medically underserved locations,” the associations wrote. “It would also leave hospitals in an untenable catch-22: Without expert advice hospitals cannot ensure that their transactions comply with the Stark law, but even if they obtain and rely on such advice they are still in jeopardy.”
