Wednesday, May 28, 2014

Ashland hospital agrees to pay $40.9 million to settle charges it defrauded Medicare and Medicaid for six years

"King's Daughters Medical Center in Ashland has agreed to pay $40.9 million to settle allegations that it fraudulently billed federally-funded health care programs for hundreds of unnecessary heart procedures" from 2006 through 2011, Bill Estep reports for the Lexington Herald-Leader. "The payment is thought to be the largest ever involving suspected health care fraud in the federal court's Eastern District of Kentucky, which covers 67 counties in the eastern half of the state."

The hospital did not admit wrongdoing, but "agreed to internal reforms and to increased monitoring of its claims to federal health-care programs for five years," Estep reports. "Officials at the hospital, which employs 3,500 people, made the 'difficult decision' to settle the investigation rather than spend money defending allegations related to 'old cases,' the hospital said in a statement. The hospital said that it has received top rankings for its cardiac care from independent panels. Prosecutors contended that in order to pump up its bottom line, the hospital billed for stent operations and diagnostic catheterizations performed on patients who didn't need them. . . . Doctors also allegedly falsified records to justify payments."

U.S. Attorney Kerry Harvey said the hospital's $40.9 million payment is about double what it gained from improper billing. "Federal law allows for triple damages in cases involving alleged false claims to government programs," Estep notes. Perrye K. Turner, special agent in charge of the FBI in Kentucky, said "The level of funds involved in this matter is staggering. This money has been stolen from the patients and taxpayers."

"The government also argued that King's Daughters had improper relationships with five doctors," Estep reports. "The hospital made unreasonably high payments to the five, and they in turn referred patients to the hospital, prosecutors alleged. . . . The allegations outlined in the settlement are similar to claims in pending state-court lawsuits that doctors at King's Daughters misrepresented the severity of patients' heart conditions in order to justify heart procedures on more than 500 patients."

Estep notes that the settlement "was the third large agreement finalized this year" after Harvey pledged to ramp up efforts against fraud: "Harvey said there are a number of other federal health care fraud investigations underway in Kentucky.

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