Dignity Health agrees to pay $37 million to settle Overbilling Claims

Dignity Health agrees to pay $37 million to settle Overbilling Claims

A three-state hospital chain based in San Francisco, Dignity Health, has agreed to pay the government $37 million to settle allegations that it overbilled Medicare and a military health care program for years.

The Justice Department said that Dignity Health, previously known as Catholic Healthcare West, submitted bills for inpatient care at 13 of its 39 hospitals in California, Nevada and Arizona that should have been charged at less costly outpatient rates.

The Justice Department said that from 2006 to 2010, the bills include cardiovascular surgeries for stents and pacemakers, and diagnostic procedures at the 13 hospitals and a spinal operation called kyphoplasty at four hospitals from 2000 to 2008. Medicare and a military health program called Tricare had paid the bills.

Ivan Negroni, chief of the U. S. Health and Human Services Department's inspector general's office in San Francisco, said in a statement that hospitals that tried to increase profits by admitting patients for costly and unnecessary inpatient hospital stays will be held accountable.

Dignity Health, one of the nation's five largest hospital systems settled to stay away from the expense of continued litigation.

The government claimed that 13 Dignity hospitals admitted patients who did not need to be medically admitted and could have been cared for in an observation setting.

A former Dignity employee, Kathleen Hawkins, who will get $6.25 million of the settlement, filed a whistle-blower lawsuit in the US District Court for the Northern District of California under the False Claims Act.

"The billing disputes reflect widespread confusion in the health care industry on unclear federal standards for approving coverage of patient admissions. As a result, it is often challenging for physicians to ensure their documentation adequately reflects their decision-making", said the company.

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