Yale fraud investigation settled for $5.6 million

Yale University School of Medicine in New Haven, CT, has agreed to pay $5.6 million to settle a major billing fraud investigation. The payout will end one of the most closely watched dramas in the government’s recent spate of fraud investigations.

The school announced the settlement recently but noted that it does not include an admission of liability. Liability or no, Yale is losing a big chunk of change.

The settlement agreement with the U.S. attorney for Connecticut and the U.S. Department of Health and Human Services requires Yale to refund $500,289 (including interest) to the federal government for billing irregularities concerning Medicare and other federal health care programs.

In addition to paying the refund, Yale will pay $1.8 million to a number of insurance companies and $2.5 million to individuals and other companies. The school also is paying $700,000 to the federal government for "complete resolution" of the claims.

The payments will end an investigation of credit balances at Yale related to medical billing. The credit payments resulted from duplicate payments from multiple payers, as well as payments that could not be matched to outstanding charges for patient care. Yale attributes the credit balances to faulty administrative systems that are now being upgraded.

Yale anticipates $120 million in payments for patient care this year, so the $5.6 million represents about 5% of the year’s total patient care income.