Four Connecticut hospitals last week agreed to repay $11.3 million to Medicare as part of a $74 million civil fraud settlement with Anthem Health Plans announced last December.
The settlement resolved allegations that Connecticut Blue Cross and Blue Shield, which Anthem acquired in 1997, improperly audited hospitals' Medicare cost reports as a Medicare fiscal intermediary (Dec. 13, 1999, p. 6). That resulted in Medicare overpayments to a number of Connecticut hospitals from 1986 to 1988. Anthem agreed to repay $42 million of the total overpayments and an undisclosed number of Connecticut hospitals the remaining $32 million.
At the time of the settlement, an undisclosed number of hospitals had repaid a total of $16 million.
The $11.3 million payment announced last week represents the four hospitals' total debt to the federal government; $9 million is the total in overpayments returned and $2.3 million is the total interest one of the hospitals had accrued. So the total overpayments collected, minus the $2.3 million in interest, stands at $25 million.
Maria Kahn, an assistant U.S. Attorney in New Haven, said her office is working to recover the remaining $7 million in overpayments and several more million in interest from several other hospitals that she would not identify.
The Hospital of St. Raphael, a 589-bed facility in New Haven, agreed to repay $8.3 million--$6 million in overpayments and $2.3 million in accrued interest. St. Vincent's Medical Center, a 259-bed facility in Derby, agreed to repay $1.9 million. Bridgeport (Conn.) Hospital, a 346-bed facility, will repay $800,615; and 160-bed Griffin Hospital, Derby, will repay $307,740. None of the four hospitals admitted legal wrongdoing.
David Benfer, president and CEO of St. Raphael's, said the settlement was strictly a reimbursement issue.
"The overpayment happened in 1986-1987, before my time here," Benfer said. "We determined it was an overpayment, self-reported it and returned the money. But over that time period, there was an accrued interest, which we're repaying."