Rex Healthcare, Raleigh, N.C., has agreed to pay $1.9 million to settle allegations that the hospital admitted patients with government insurance to the hospital even though their procedures could have been done more cheaply in an outpatient setting.
Rex Healthcare settles whistle-blower case
Officials with 431-bed Rex Healthcare did not admit liability when they agreed to settle whistle-blower allegations, and investigators did not concede that their claims were ill-founded by accepting the payment, according to the settlement.
Linda Butler, chief medical officer for Rex Healthcare, said the hospital settled the case to avoid the cost of litigating the allegations, even though the hospital was following the regulations that were in place until 2007. “We disagree with the statement about knowing about Medicare fraud. We did nothing wrong. We were following the rules at the time, and they decided to retroactively penalize us,” Butler said.
Some of the allegations against Rex involve a much-publicized type of fraud being investigated by the U.S. attorney's office in Albany, N.Y., in which hospitals overbilled Medicare for a spinal-repair procedure called kyphoplasty.
Two whistle-blowers told the government that hospitals across the country, including Rex Healthcare, routinely admitted patients for the surgery even though hospitalization was unnecessary, thereby increasing Medicare costs. Other hospital officials targeted by the probe have said they settled the claims because of the high cost of litigation.
The Rex case says government investigators also turned up other instances of needless one-day hospitalizations not related to kyphoplasty between 2004 and 2007, but the settlement did not stipulate what procedures were involved.
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