Pennsylvania and New York hospitals, including a member of Geisinger Health Care System, are settling fraud charges partly the result of bills they submitted to Medicare on the advice of a "revenue-enhancement" consultant.
So far, 164-bed Geisinger Wyoming Valley Medical Center in Wilkes-Barre, Pa., has agreed to pay $425,000, twice the value of its alleged fraudulent billing, in a settlement dated Jan. 29. In a second Jan. 29 settlement, 105-bed Warren (Pa.) General Hospital has agreed to pay $145,000.
MODERN HEALTHCARE obtained copies of the agreements last week under the federal Freedom of Information Act.
Under the settlements, neither hospital admits to any violation of federal law. Both hospitals denied knowingly submitting false claims to Medicare and said they relied on the consultant, New York-based Metzinger Associates.
Geisinger Wyoming is one of two hospitals in the Danville, Pa.-based Geisinger system. Warren is part of seven-hospital Vantage Health Care Network of Meadville, Pa.
Metzinger Associates provided consulting services on Medicare cost reporting and reimbursement to more than 200 hospitals in 17 states. In a December 1994 lawsuit, the federal government charged that the firm led hospitals to submit false claims to Medicare for tests that weren't requested and in some cases weren't performed.
The U.S. attorney for eastern Pennsylvania, who is coordinating the case, added 10 hospitals to its lawsuit against Metzinger in 1996.
Lawrence Hospital in Bronxville, N.Y., one of eight hospitals remaining in the case, said it is negotiating a settlement with the government but final papers haven't been signed. A Lawrence spokeswoman said the 280-bed hospital would settle without admitting wrongdoing.
MODERN HEALTHCARE wasn't able to locate one facility named in the complaint, and the remainder didn't return telephone calls.
James Sheehan, assistant U.S. attorney for Philadelphia, said additional settlements have been reached but declined to provide further information.
One private attorney who has been following the Metzinger case and its spillover onto hospitals speculated that other settlements may have included confidentiality agreements.
Such agreements bar the parties from publicizing the settlements, although they are available under the Freedom of Information Act.
The clerk's office of the U.S. District Court in Philadelphia, where the Metzinger case was filed, said the suit was dismissed March 21 because of pending settlements. No agreements, however, had been filed with the court.
Attorneys for Metzinger didn't return telephone calls.
In addition to the government's lawsuit, other former Metzinger clients are participating in a voluntary audit program to reimburse the government for any wrongful claims submitted to Medicare, said Thomas Boyle, an attorney with Buchanan Ingersoll in Pittsburgh who represents several former Metzinger clients, none of which are involved in the case.
A Geisinger executive said the case should show hospitals how careful they must be when structuring incentive payments for consultants. Metzinger received a portion of the extra revenues it generated from its review of Medicare claims.
Thomas Sokola, chief financial officer for Geisinger's Eastern Region, said he would be very leery of such a structure. During the period of alleged false claims, covering 1989 to 1994, he wasn't in his current post.
About half the settlement amount is unrelated to Metzinger's advice, Sokola said. In its own internal review, Geisinger discovered it was performing tests not ordered.