Twenty-eight hospitals in northern Ohio have paid a total of $5.8 million to settle federal and state charges of Medicare and Medicaid fraud.
The settlements, which ranged from $11,000 to $750,000, are the latest in the government's Project Bad Bundle, which is aggressively investigating hospitals nationwide for lab "unbundling."
None of the settlements includes an admission of wrongdoing.
The Center for Health Affairs, a Cleveland hospital association, criticized the way government investigators extracted settlements from the hospitals, many of them not-for-profits.
"We in the hospital community employ 75,000 people in northeast Ohio, and to say that there's a pattern of abuse going on through this group of people is very inappropriate," said Sally Domm, a spokeswoman for the center.
Medicare rules require hospitals to bundle certain blood tests, billing for all the tests under one code instead of billing for each test. Unbundling, or billing separately for these tests, could give hospitals higher Medicare reimbursements.
The American Hospital Association and the Ohio Hospital Association sued the federal government in October 1996 to stop the use of the False Claims Act in Project Bad Bundle.
The AHA and OHA are appealing a dismissal of their lawsuit by Judge Kathleen McDonald O'Malley in U.S. District Court in Cleveland in September 1997.
The OHA wants to pursue the lawsuit even though many of its members are choosing to settle the lab billing fraud charges.
Since Project Bad Bundle was launched in Ohio in 1996, it has spread to 15 states. To date, the government has recovered more than $15 million.