Following the lead of Ohio authorities, U.S. attorneys in Illinois and Virginia are probing hospitals for laboratory-billing Medicare fraud.
Meanwhile, in Mississippi, hospitals haven't reported inquiries into their billing, but a state health department laboratory recently received what looked like a form letter more or less asking it "to find (its) sins and 'fess up," said Betty Jane Phillips, M.D., deputy state health officer.
Mary Patterson, vice president for policy at the Mississippi Hospital Association, said she expects many of the association's 105 members eventually will receive similar letters from the U.S. attorney's office. "On the national level, what we've heard is Mississippi is next," Patterson said. On the other hand, in the last fraud probe to hit Mississippi, Patterson said rumor had the state a target months before activity began.
The probes focus on how hospitals billed Medicare for certain outpatient laboratory tests. Federal authorities contend hospitals should have billed the tests as a group instead of at higher individual rates. They're offering lower penalties to hospitals that determine their improper billing and voluntarily agree to a settlement.
At stake are hundreds of millions of dollars. In Ohio, 24 hospitals so far have settled fraud charges for a total of $8.8 million (April 28, p. 4). About 125 of the state's remaining hospitals have been told to review their billing.
From the beginning, hospitals feared the Ohio investigation would be "franchised" to other states. In that tactic, a U.S. attorney in one state, working with HHS, develops the framework for an investigation and then shares it nationally.
At least 25 hospitals in Virginia have received letters stating they might have billed Medicare improperly, the Virginia Hospital and Healthcare Association said last week.
In Illinois, the probe that began with letters to 10 hospitals last November has reached a new level. The Illinois Hospital and HealthSystems Association said a wave of letters was mailed last week, although the number of hospitals affected wasn't known.