Shands to pay $26 million for claims marked inpatient
Shands Healthcare in Jacksonville, which operates a network of healthcare providers in Florida, will pay the government and the state of Florida $26 million to settle allegations that six of its healthcare facilities submitted false claims to Medicare, Medicaid, and other federal healthcare programs for inpatient procedures that should have been billed as outpatient services, the Justice Department announced.
The six Florida hospitals are: Shands at Jacksonville; Shands at Gainesville, also known as Shands at the University of Florida; Shands Alachua General Hospital; Shands at Lakeshore; Shands Starke, and Shands Live Oak.
From 2003 through 2008, the six hospitals knowingly submitted inpatient claims to Medicare, Medicaid and TRICARE for certain services and procedures that Shands Healthcare knew were correctly billable only as outpatient services or procedures, the Justice Department alleged. In a released statement, Shands Healthcare said its officials fully cooperated with the state and federal investigation and negotiated the settlement agreement to avoid long and costly litigation. There was no admission of liability, the statement said.
"We hold ourselves accountable for the highest standards of care and service. The case in question does not involve the failure to provide high-quality patient care, but rather inconsistent billing processes," Timothy M. Goldfarb, CEO of Shands HealthCare in Gainesville, said in a released statement. "We proactively initiated an independent audit that identified some opportunities to improve billing processes at Shands. We took immediate steps to make improvements."
According to Shands, changes included:
- improvements to case management protocols and utilization review processes with an improved team approach to accurately assess and code the care provided;
- the use of improved software;
- implementation of new policies and procedures;
- supplemental employee training;
- the engagement of expert physician advisors who help assess coding and are on staff 24/7.
The six hospitals were named as defendants in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to sue on behalf of the government and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in Jacksonville, FL, by Terry Myers, the president of a healthcare consulting firm, YPRO Corp. According to a statement from Shands Healthcare, the whistleblower had been hired as an independent consultant by Shands in 2006 and 2007 to conduct a routine audit of its billing practices. The audit showed inconsistent billing processes in 2006 and 2007. "Allegedly, for some patients, Shands may have billed Medicare and Medicaid for short overnight inpatient admissions rather than for less expensive outpatient or observation services," the statement said.
Of the $26 million settlement, $25.2 million will go to Medicare and other federal health care payers. The settlement also resolved allegations under the Florida False Claims Act; the state of Florida will receive $829,600. Myers’ portion of these recoveries has yet to be determined.
The Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative was announced in 2009 by the attorney general and the HHS secretary. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud. Since January 2009, the Justice Department has recovered a total of more than $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal healthcare programs.