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Hospitals to pay U.S. for Medicare fraud

WASHINGTON, D.C. — Seven hospitals in six states have agreed to pay the United States more than $6.3 million to settle allegations that they submitted false claims to Medicare, the Justice Department announced today.

The hospitals are in Florida, Mississippi, Texas, South Carolina, North Carolina and Alabama, but all of the settling facilities were named as defendants in a lawsuit filed under the False Claims Act in 2008 in federal district court in Buffalo by Craig Patrick and Charles Bates.

The qui tam, or whistleblower, provisions of the Act permit private citizens, called “relators,” to file lawsuits on behalf of the United States and share in any recovery. Patrick of Hudson, Wis., is a former reimbursement manager for Kyphon and Bates was formerly a regional sales manager for Kyphon in Birmingham, Ala. The relators will receive approximately $1.1 million as their share of the settlement proceeds.

The settlements resolve allegations that the hospitals overcharged Medicare between 2000 and 2008 when performing kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis.  In many cases, the procedure can be performed safely as a less costly out-patient procedure, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.