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The healthcare system involved in a false claims investigation prompted by a former employee blowing the whistle has settled the case. Dignity Health hospital system, based in San Francisco, has agreed to pay $37 million to settle the charges.
The whistleblower in the case, former director of medical management Kathleen Hawkins, will receive about $6.25 million of the settlement total, the Department of Justice announced recently.
Hawkins had charged that 13 of Dignity Health’s hospitals in California, Nevada, and Arizona knowingly submitted false claims to Medicare and Tricare by admitting patients who could have been treated on a less costly outpatient basis. Dignity Health said in a statement there is "widespread confusion" about federal standards for approving coverage of patient admissions.
The United States alleged that from 2006 through 2010, 13 Dignity hospitals billed Medicare and TRICARE for inpatient care for certain patients who underwent elective cardiovascular procedures (stents, pacemakers) in scheduled surgeries when the claims should have been billed as outpatient surgeries. In addition, the government alleged that from 2000 through 2008, four of the hospitals billed Medicare for beneficiaries undergoing elective kyphoplasty procedures, which are minimally-invasive and performed to treat certain spinal compression fractures that should have been billed as less costly outpatient procedures.
Lastly, the government alleged that from 2006 through 2010, 13 hospitals admitted patients for certain common diagnoses where admission as an inpatient was medically unnecessary and appropriate care could have been provided in a less costly outpatient or observation setting. (For information on the risk manager’s role as whistleblower, see Healthcare Risk Management, June 2014, pp. 49-53.)