The U.S. Supreme Court is scheduled to hear oral arguments Nov. 29 in a case that may affect the reach of the 1863 False Claims Act. Under the law, whistleblowers can bring suit against government contractors, including Medicare-certified hospitals, on behalf of the government. The case involves a 1995 lawsuit against the state of Vermont filed by a lawyer then working for the state. In his suit, which the government refused to join, the lawyer accused the Vermont Agency of Natural Resources of inflating salary and wage expenses to the U.S. Environmental Protection Agency to obtain higher federal grants. The state argues that it's immune from such lawsuits. The high court may rule specifically on that issue or generally on whether individuals can file such suits on behalf of the federal government. A decision isn't expected until next summer.
U.S. District Judge Susan Bucklew in Tampa, Fla., is scheduled on Dec. 3 to sentence the two midlevel Columbia/HCA Healthcare Corp. executives convicted of criminal Medicare fraud in July. A federal jury said the pair participated in a conspiracy that resulted in $3 million in Medicare overpayments to one of Columbia's hospitals, 249-bed Fawcett Memorial Hospital in Port Charlotte, Fla. Jay Jarrell, 44, president of Columbia's southwest Florida division, and Robert Whiteside, 49, director of the company's single-markets division, face a maximum 30 years in prison and $1.5 million in fines each. The same jury acquitted the third defendant in the case and couldn't reach a decision on the fourth, Carl Lynn Dick, 55, who later entered a plea agreement to avoid a second trial.
Twenty-nine-hospital Christus Health, Irving, Texas, lost $51 million on revenues of $2 billion in the fiscal year ended June 30, according to figures released by Standard and Poor's and confirmed by Christus. The unexpected loss reflected one-time write-offs and charges, including costs related to the Feb. 1 formation of Christus through the merger of Sisters of Charity Health Care System and Incarnate Word Health System. The credit-rating agency placed Christus' AA- rating on CreditWatch with negative implications.
Edgewater Medical Center in Chicago last week agreed to pay $1 million to settle allegations that it improperly upcoded pneumonia cases billed to Medicare and Medicaid from 1995 to 1998. Under the settlement, the 213-bed hospital admitted no wrongdoing. Edgewater is the 10th hospital nationwide and the third in Chicago to settle such charges, although Edgewater voluntarily came forward with its billing problems. The other settlements resulted from a nationwide investigation by HHS' inspector general's office. The investigation focused on how hospitals bill Medicare for pneumonia.
A Denver-based physician network has ceased operations after PacifiCare of Colorado terminated its capitated payments. The state's largest HMO said it was concerned that the network, Millennial, could not manage costs and make timely payments to physicians. The HMO said it would pay physicians directly for services rendered in November and December and assume responsibility for medical management functions that had been delegated to Millennial. In a written statement, a Millennial official condemned the HMO for withholding physician funds. The physician network has about 190 primary-care physicians and 1,030 specialists, according to PacifiCare, and served 80,000 of the plan's commercial and Medicare enrollees.
UniHealth, Burbank, Calif., said last week it will sell a large piece of its Huntington Provider Group independent practice association to a company formed by at least 125 member physicians. Pasadena, Calif.-based Physician Associates of the Greater San Gabriel Valley is scheduled to take possession of a 1,000-physician network covering northeastern metropolitan Los Angeles on Jan. 1. Terms were not disclosed. The IPA once numbered more than 2,000 physicians, but parts of the network have been sold to other buyers or shut down.