Medicare

A settlement has been reached in whistleblower class action lawsuits brought against Adventist Health System who is acccused of maintaining improper compensation arrangements with referring physicians and by miscoding claims.

The whistleblowers’ share of the settlement has not yet been determined. 

The allegations arose from two lawsuits, the first of which was filed in December 2012 and claimed that Adventist submitted false claims to the Medicare and Medicaid programs for services rendered to patients referred by employed physicians who received bonuses based on a formula that improperly took into account the value of the physicians’ referrals to Adventist hospitals.  Additionally, the settlement resolves allegations that Adventist submitted bills to Medicare for its employed physicians’ professional services containing certain improper coding modifiers, and thereby obtained greater reimbursement for these services than entitled.

The United States has intervened in a lawsuit and filed a complaint against H. Ted Cain, Julie Cain, Corporate Management Inc, and Stone County Hospital Inc for submitting false claims to the Medicare program by knowingly charging excessive and ineligible expenses from 2002 to the present.  

The government’s complaint alleges that the Cains as well as the hospital and the management company abused the special Medicare rules for rural hospitals.  In particular, the government contends that they claimed to be serving the hospital in various management and directorship positions but in fact did little of the work for which the hospital paid them and any work they did duplicated work performed by the hospital and the management company staff, which were also paid by the hospital.  The government also contends that Ted Cain improperly claimed the expenses for his personal luxury automobiles on the hospital’s cost reports and his management company wrongfully charged to the hospital work that he did at his other businesses.

A settlement has been reached in a whistleblower class action lawsuit brought against GE Healthcare Inc regarding a company it acquired in 2004, Amersham Health Inc.  Amersham is accused of causing Medicare to make overpayments by providing false or misleading information.

The whistleblower will receive $5.1 million from the government’s recovery.

The whistleblower lawsuit, filed in 2006, alleged that Amersham Health provided false or misleading information to Medicare regarding the number of doses available from vials, causing Medicare to pay for Myoview at artificially inflated rates. Myoview is distributed in multi-dose vials of powder. In a process known as reconstitution, nuclear pharmacies mix the powder with a radioactive agent to prepare individual doses that are injected into patients as part of the cardiac imaging procedures. Certain Medicare payment rates for Myoview were based, in part, on the number of doses available from vials of Myoview.

A settlement has been reached in a whistleblower class action lawsuit brought against Jackson-Madison County General Hospital who is accused of overbilling Medicare and Medicaid for certain cardiac procedures.

The whistleblower's portion of the settlement was not disclosed.

The lawsuit, filed in 2007, alleged that Jackson-Madison County General Hospital placed cardiac stents in patients when the procedure was not required, together with other cardiac procedures that were deemed not medically necessary. The hospital, according to allegations stemming from an investigation and a whistleblower healthcare fraud lawsuit, then billed Medicare and Medicaid.

A settlement has been reached to resolve False Claims Act Allegations against Dr. Walter Janke, his wife, Lalita Janke, and Vero Beach, Fla.-based Medical Resources L.L.C. (MR).  They are accused of submitting false diagnosis codes to Medicare.

The Jankes were the owners of America’s Health Choice Medical Plans Inc. (AHC), a Medicare Advantage Organization (MAO), approved by the federal health care program to provide health care to enrolled Medicare beneficiaries. The Jankes also owned MR, AHC’s primary care provider. AHC and MR are no longer doing business.

The United States allged that the Jankes and MR violated the False Claims Act by causing AHC to falsely increase the severity of beneficiary diagnoses to obtain higher Medicare payments. Under the Medicare Advantage Program, MAO's are paid more to provide services for members with serious and/or chronic medical conditions then they are for relatively healthy members.

In addition to suing the Jankes and MR, the United States successfully petitioned the court to freeze approximately $20 million of the Janke's assets believed to be the proceeds of their unlawful scheme. A portion of the Janke’s frozen assets, along with monies resulting from the dissolution of AHC now held in receivership by the Florida Department of Financial Services, will be used to pay the settlement.

A settlement has been reached in a whistleblower class action lawsuit brought against El Centro Regional Medical Center who is accused of defrauding Medicare.

The whistleblower will receive $375,000.

The original lawsuit was filed in May 2006. The United States alleged that the 165-bed acute care hospital fraudulently inflated its charges to Medicare patients to obtain larger reimbursements from the federal health care program. The settlement covers claims submitted by the hospital for short inpatient admissions, usually of one day or less, when the services should have been billed on an outpatient “observation” basis or as emergency room visits.

A settlement has been reached in a whistleblower class action lawsuit brought against Metropolitan Ambulance & First Aid Corp, Metro North Ambulance Corp, Big Apple Ambulance Service Inc, including their president, Steve Zakheim. They are accused of falsifying records to appeal a Medicare program refund demand.

The whistleblower will receive $618,450.

The original whistleblower case was filed in 2000.  The United States alleged that the companies and Zakheim used, or caused the use of, falsified records to appeal a Medicare program refund demand. Medicare had demanded the companies return millions of dollars they had been paid for medically unnecessary ambulance trips. Under Medicare rules, the companies could bill for these expensive non-emergency transports only if the patient could not be transported by any other means, such as by car or by wheelchair van. Medicare audited the companies’ past billings and concluded that the companies had charged Medicare tens of millions of dollars for ambulance trips that did not meet this standard. Medicare demanded a refund and afforded the companies an extensive informal and formal appeals process to prove that their billings were proper.

The government contended that, rather than contesting the refund demand fairly, the companies resorted to fraud when they could not otherwise prove an ambulance was medically needed. According to the suit, in their ensuing appeals, the companies used, and Zakheim caused the use of, hundreds of letters attesting to the need for an ambulance that were forged or otherwise purported to come from some neutral, disinterested health care provider when they in fact did not.

A settlement has been reached in a whistleblower class action lawsuit brought against nine hospitals located in Alabama, Indiana, Florida, Michigan, South Carolina, New York and Minnesota. They are accused of submitting false claims to Medicare.

The settling facilities and the amount being paid by each to the United States are Ball Memorial Hospital, Muncie, Ind. ($1,995,431); Bethesda Memorial Hospital, Boynton Beach, Fla. ($356,079); Bloomington Hospital, Bloomington, Ind. ($1,443,848); Genesys Regional Medical Center, Grand Blanc, Mich. ($931,742); Huntsville Hospital, dba The Health Care Authority of the City of Huntsville, Huntsville, Ala. ($1,992,756); Palmetto Health dba Palmetto Health Baptist Hospital, Columbia, S.C. ($1,861,083.14); St. Elizabeth Medical Center, Utica, N.Y. ($195,976); St. Mary’s of Michigan Hospital, Saginaw, Mich. ($260,065.21); and United Hospital, St. Paul, Minn. ($428,656).  The whistleblowers will receive approximately $1.5 million as their share of the settlement proceeds.

The original whistleblower case was filed against multiple facilities and filed in 2008.  The United States specifically alleged that these nine hospitals overcharged Medicare between 2000 and 2008 when performing kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as a less costly out-patient procedure, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings. 

The settlement with these facilities follows the settlements that the government reached in May and September 2009 with nine other hospitals for alleged kyphoplasty-related Medicare fraud claims, as well as the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an in-patient procedure, even though in many cases the minimally-invasive procedure should have been done on an out-patient basis.

A settlement has been reached in a whistleblower class action lawsuit brought against Robert Wood Johnson University Hospital Hamilton fraudulently inflating its charges to Medicare. 

Whistleblowers that filed two lawsuits that these allegations are based upon will receive $1,111,250 of the total recovery.

The first of the lawsuits was filed in November 2002. The United States alleged that the hospital inflated its charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid. The United States intervened in both lawsuits in January 2008. 

In addition to its standard payment system, Medicare provides supplemental reimbursement, called "outlier payments," to hospitals and other health care providers in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payments system to ensure that hospitals have the incentive to treat inpatients whose care requires unusually high costs.

A settlement has been reached in a whistleblower class action lawsuit brought against Atricure Inc who is accused of submitting false and fraudulent claims for Medicare reimbursement.

The whistleblower that filed this lawsuit will receive a total of $625,000.

The case was originally filed in 2007.  The United States alleged that Atricure marketed its medical devices to treat atrial fibrillation (the most common cardiac arrhythmia or abnormal heart rhythm), a use that is not approved by the U.S. Food and Drug Administration (FDA). Atricure also allegedly promoted expensive heart surgery using the company’s devices when less invasive alternatives were appropriate, advised hospitals to up-code surgical procedures using the company’s devices to inflate Medicare reimbursement, and paid kickbacks to health care providers to use its devices. The United States asserted that by engaging in this conduct, Atricure knowingly violated the Food, Drug, and Cosmetic Act and caused the submission of false and fraudulent claims in violation of the False Claims Act.