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Medicare Fraud Case Involving 55 Hospitals in 21 States Finally Settled

Settlement of $34 Million Reached in Massive, Multi-State Medicare Fraud Whistleblower Case

In the first week of July, federal officials announced that 55 hospitals, spanning 21 states, have agreed to pay $34 million to settle a medicare fraud whistleblower lawsuit.

According to reports, the medicare fraud allegations claim that several hospitals overbilled Medicare for a type of back surgery called “kyphoplasty.” The settlement resulted in the federal government’s investigation into kyphoplasty procedures nationwide. So far, the investigation into the medicare fraud resulted in the government recovering $74 million, including the $34 million settlement from this month.

“This isn’t a case of simple paperwork errors or innocent misunderstanding of Medicare rules,” said Tim McCormack, a Washington, DC, lawyer with Phillips & Cohen. “Hospitals across the country misrepresented the type of treatment they provided to patients so they could bill Medicare for expensive inpatient stays.”

The government became aware of the medicare fraud allegations after a qui tam, or whistleblower, lawsuit was filed in a federal court in Buffalo, NY in 2008. Two former Kyphon employees, Craig Patrick and Chuck Bates, filed the lawsuit.

The two former employees allege that Kyphon, the company that sells the equipment and materials needed for kyphoplastic surgery, persuaded hospitals to bill the surgery as inpatient in order to get more money from Medicare. However, most kyphoplasties are routine, scheduled, outpatient surgeries, and generally take no more than a few hours. The surgery is used to treat spinal compression fractures in the vertebrae which are often associated with osteoporosis. A balloon pumps up the compressed vertebrae to assume some of their original shape, then medical cement is used to fill in the gaps and stabilize the spine.

The hospitals that are settling are located in Alabama, California, Delaware, Florida, Georgia, Hawaii, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Tennessee and Texas. The settlements range from $374,814 (New England Baptist Hospital in Boston, Mass.) to $7.14 million (23 hospitals in California, Florida, Georgia, Kansas, Mississippi, Nevada, Oklahoma, Tennessee, and Texas).

“Those who are complicit in causing the Medicare program to pay out unnecessary dollars will be pursued by OIG and our law enforcement partners,” Inspector General Daniel R. Levinson said at the time. “This $75 million settlement restores much-needed funding to the Medicare Trust Fund, as well as protecting the integrity of the program and its beneficiaries.”

The Strom Law Firm Protects Medicare Fraud Whistleblowers in South Carolina

Common whistleblower actions include:

Qui tam lawsuits have been, and continue to be, a very effective and successful tool in combating government procurement and program fraud.

Bolstered by amendments passed by Congress in 1986, the law has armed private citizens who have independent and direct knowledge of fraud, with a weapon to prosecute government contractors and others who are defrauding the Government.

If you have first-hand knowledge of government fraud occurring at your place of employment or your doctor’s office, including Medicare fraud, the attorneys at the Strom Law Firm can help protect your rights. In order to help the government provide the best possible services, Medicaid and Medicare fraud must be reported as soon as possible. The attorneys at the Strom Law Firm understand the complexity of qui tam and whistleblower suits, and we offer free, confidential consultations to discuss the facts of your case. Contact us today.803.252.4800



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