Ohio hospitals continue to cut deals with the federal government to settle allegations of Medicare billing fraud despite efforts by the Ohio Hospital Association and the American Hospital Association to stop the government's actions in federal court.
Last week, eight more hospitals paid civil monetary penalties totaling nearly $2.6 million to settle charges that they improperly billed Medicare for certain lab tests (See chart).
Eight other Ohio hospitals settled similar allegations earlier this year, paying a total of $6.3 million in fines. And another 75 Ohio hospitals have agreed to participate in a voluntary disclosure program in which they pay reduced fines in exchange for turning themselves in to the government.
Mary Yost, a spokeswoman for the Ohio Hospital Association, said the association doesn't view the settlements as undermining the OHA/AHA lawsuit. "If anything, it helps our case," she said.
The fact that hospitals are rushing into settlements is evidence that the government's billing probe is tantamount to extortion because, given the potential downside, the hospitals have no choice but to settle, Yost said.
Hospitals that fight the government's allegations could face fraudulent billing charges under the federal False Claims Act, which carries significantly higher fines and penalties.
In their lawsuit against HHS, the OHA and the AHA say the government's use of the False Claims Act to "coerce" hospitals into settling is illegal. They also say the government failed to adequately instruct hospitals on how to bill Medicare for the lab tests so they shouldn't be liable for any claims they submitted for Medicare payment.
The hospital associations sued HHS in October in U.S. District Court in Cleveland (Oct. 14, p. 12). The government's response was due by late last week.
The lawsuit is in response to an investigation of hospital Medicare billing practices launched by HHS' inspector general's office and the U.S. attorney's office in Cleveland and Akron. The investigation focuses on Ohio hospitals, but the AHA fears that the investigation will spread nationwide.
According to the government, at least 150 of Ohio's 185 acute-care hospitals have been improperly billing Medicare separately for certain laboratory tests that should have been bundled and paid for collectively.