55 Hospitals Will Pay Over $34 Million to Settle False Claims Act Charges

July 16, 2013 — The health care fraud problem in our country is massive, and the U.S. Justice Department depends on the information it receives from tipsters to uncover and attack false claims. The qui tam provisions of the federal False Claims Act authorize whistleblowers to fight fraud directly by filing a lawsuit against those defrauding the federal government. The suit is filed on behalf of the federal government, which may decide to intervene in the lawsuit. The whistleblower may receive a portion of any funds recovered by the government through the suit.

Medicare Fraud Scheme Involving Kyphoplasty Leads to Major Settlement

A total of 55 hospitals located in twenty-one states will pay the federal government over $34 million to settle charges that they submitted false claims to Medicare for inpatient kyphoplasty procedures, according to the Justice Department. Kyphoplasty is used to treat some spinal fractures that are often caused by osteoporosis. It is minimally invasive and frequently performed safely on an outpatient basis. The settlements resolve allegations that these hospitals charged Medicare for costly inpatient kyphoplasty procedures to increase their billing and not because the hospital admission was medically necessary.

These settlements are the latest in a multi-party investigation involving overbilling for kyphoklasty procedures. The Justice Department has reached settlements with over 100 hospitals, and those settlements total approximately $75 million. The government also had settled previously with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle claims that it defrauded Medicare by counseling hospitals to perform kyphoplasty procedures on an inpatient basis rather than as outpatient procedures.

Of the 55 hospitals involved in the new settlements, 51 were named in a qui tam lawsuit brought by two former employees of Kyphon. The two insiders will receive approximately $5.5 million from the new settlements.

Whistleblowers Help Protect Taxpayer Funds

Insiders are often in the best position to spot and inform on Medicare or Medicaid fraud schemes. Informants need to understand their rights under the False Claims Act, however, before they notify the authorities of health care fraud. The whistleblower lawyers with Waters & Kraus provide skilled legal counsel to tipsters every day. Contact us by email or phone our False Claims Act attorneys at 855.784.0268 to learn more about our qui tam practice.

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