The U.S. attorney in Philadelphia settled the nation's first case charging an acute-care hospital under the federal False Claims Act for alleged failure-of-care violations. Central Montgomery Medical Center, Lansdale, Pa., owned by for-profit Universal Health Services, will pay $200,000 to settle the claims, which involved the alleged illegal use of physical and chemical restraints. The 119-bed hospital also must hire a consultant to monitor its compliance with federal law on restraints. Central Montgomery denied wrongdoing, saying its use of "restraints was at all times appropriate," but it settled to avoid the "uncertainty, inconvenience and expense" of litigation.
While the U.S. attorney's office in Philadelphia has pioneered the use of the False Claims Act in failure-of-care cases against nursing homes, this marked the first settlement involving similar allegations against a hospital. The government alleged that Central Montgomery violated Medicare conditions of participation by illegally restraining patients in medical-surgical settings during a 10-month period in 2002 and that bills for services rendered to those patients should therefore be considered false claims. A state survey in August 2002 found that in 91 out of 91 cases, the hospital did not adequately document that it complied with Medicare policy on restraints or skipped required steps. Medicare regulations from 1999 require hospitals to use other alternatives to control patient behavior before implementing physical or chemical restraints. The alleged misconduct occurred during a transitional period after the hospital was acquired by UHS. According to the settlement, the hospital changed its restraint policies and practices in September 2002, "has drastically reduced its use" and now offers "multiple less-restrictive alternatives." -- by Mark Taylor