R.I. hospital agrees to $5.3 million settlement

(This article has been updated with a correction.)

Rhode Island Hospital in Providence has agreed to pay the federal government $5.3 million to resolve allegations that the medical center improperly kept about 260 patients in overnight stays after stereotactic radiosurgery, otherwise known as Gamma Knife treatments, according to an announcement from federal officials.

The 683-bed hospital stands accused of billing Medicare and Medicaid for the overnight stays, even though the treatments didn't justify the extra expense of hospitalization, the Justice Department said in a news release.

The news release from the government said hospital officials did not receive a release from any criminal or tax liabilities by signing the settlement of civil allegations, which came after an investigation by the FBI, the Rhode Island U.S. attorney's office and the HHS office of inspector general.

A news release said the hospital had agreed to repay $2.6 million in actual payments for medically unnecessary overnight hospital stays, plus another $2.7 million in double or triple damages for some of the 260 patients who received their treatments between 2004 and 2009.

An e-mailed statement from the hospital said that all of the radiosurgery procedures were medically necessary.

The statement noted that Medicaid and private insurance companies “routinely” preauthorize radiosurgery as an inpatient procedure, and hospital officials believed that the same standard practice of care should be applied to Medicare patients as well. Stereotactic radiosurgery is commonly used to slow the growth of deep brain tumors that are difficult to treat surgically.

“The hospital has complied fully with the DOJ investigation, but admits no wrongdoing, and by settling avoids incurring the additional and significant costs associated with litigation,” the hospital statement says.