Allina Hospitals and Clinics, Minneapolis, last week settled allegations of Medicare billing fraud for $16 million and resolved the three whistleblower lawsuits that prompted the federal investigation.
Allina did not admit guilt. Federal investigators had accused the not-for-profit system of duplicate billing and upcoding to obtain higher Medicare payments from 1994 to 2001. The billing probe became public last April.
Allina said the inaccurate billing was confined to the period from 1994 to 1996. As part of the settlement, the system signed a five-year corporate integrity agreement that requires it to retrain its 23,000 employees, maintain a compliance program introduced in 1999 and report to HHS on its fulfillment of the agreement, an Allina spokeswoman said.
The 16-hospital system announced a tentative settlement agreement in September 2001, during its split from Medica health plan, the other half of the former integrated Allina Health System. Allina and Medica dissolved their integrated system after an investigation by the Minnesota attorney general's office questioned the financial relationship between the hospital division and the 1 million-member health plan (Oct. 1, 2001, p. 14).