Sutter Health Settles Whistleblower Lawsuit for Medicare Fraud Involving Anesthesia Billing
Major California hospital chain Sutter Health has agreed to settle a whistleblower lawsuit involving false Medicare claims
The hospital group has agreed to pay $46 million, as well as disclose more pricing information to consumers, to resolve the whistleblower lawsuit.
Sutter Health currently runs 24 hospitals in Northern California. Reportedly, the hospital double-billed Medicare for anesthesia services, which were already covered in general billing for the hospital operating room. Federal officials and consumer advocates have been putting pressure on the hospital group to explain its higher prices, and many employers have been demanding greater price transparency to hold down costs.
The whistleblower lawsuit was filed in 2009 by Rockville Recovery Associates, a billing auditor that worked with a Sacramento branch of the hospital chain. In 2011, the California Department of Insurance joined the suit.
The state’s insurance commissioner, Dave Jones, hailed the settlement as a victory for consumers and billing transparency.
“This settlement represents a groundbreaking step in opening up hospital billing to public scrutiny,” Jones said. “This new transparency should lead to lower prices and point the way to similar billing reforms for all types of hospital services.”
As part of the settlement, Sutter Health did not admit any wrongdoing, and spokesman Bill Gleeson said it opted for the whistleblower lawsuit settlement to avoid spending resources on a trial.
“Because we followed the law and hospital industry practice, it was difficult to agree to a monetary settlement of any size,” said Gleeson. “We made a tough decision … that the certainty and closure of a settlement was preferable to the significant human and financial resources associated with a lengthy trial.”
“Sutter Health’s method of billing for these services was, and still is, consistent with federal and state laws and regulations,” said C. Duane Dauner, chief executive officer of theCalifornia Hospital Association, a hospital trade group. “In fact, more than 90 percent of California hospitals, including hospitals operated by the state, bill for anesthesia services in this same manner.”
Under standard whistleblower agreements, the insurance department said the state will get $20 million, and Rockville Recovery Associates will receive an undisclosed amount.
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Common whistleblower actions include:
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