Three more hospitals have inked settlement agreements, with a collective value of about $3.7 million, to resolve allegations that they defrauded Medicare by upcoding pneumonia diagnoses, HHS' inspector general's office said.
To date, at least 50 hospitals nationwide have negotiated settlements to resolve similar allegations -- paying a total of more than $48 million -- as part of a federal investigation into pneumonia upcoding. Hospitals allegedly billed Medicare for a more serious form of pneumonia than was actually treated to obtain higher reimbursement.
All three hospitals in the latest settlements denied wrongdoing and signed corporate integrity agreements to ensure monitoring of their billing practices.
In the largest of the three settlements, 296-bed Saint Anthony's Health Center, Alton, Ill., part of BJC HealthCare, St. Louis, will pay $2 million. In the other two, 144-bed Cumberland Medical Center, Crossville, Tenn., will pay $1.43 million, and 115-bed Brownsville (Pa.) General Hospital will pay $225,000.
Last week Hackensack (N.J.) University Medical Center agreed to pay $4.2 million to resolve allegations of the same type of billing scam.
The federal investigation stems from a 1995 whistleblower lawsuit filed in U.S. District Court in Philadelphia under the False Claims Act. The suit, filed by Richard Newbold, M.D., a New Hope, Pa., entrepreneur, and his company, Health Outcomes Technologies, remains partially sealed. It alleges that more than 100 U.S. hospitals falsified Medicare claims to obtain higher reimbursement, often on the advice of billing consultants.
The investigation has been controversial, at least in part because Newbold, who is not a practicing physician, never set foot in most of the hospitals named. He has been derided as a "professional relator," the legal term for the whistleblower. Newbold, however, convinced federal prosecutors of the merits of his case through a software program illustrating the billing patterns of the hospitals.