The U.S. Department of Justice (DOJ) announced recently that it reached settlements totaling $28 million with 32 hospitals in 15 states, resolving allegations that they routinely billed Medicare for minimally invasive kyphoplasty spinal procedures. These settlements were the tenth to be reached with health care providers to resolve allegations stemming from a whistleblower lawsuit filed in 2008 by Craig Patrick and Charles Bates, two former employees of Kyphon, the developer of a method to repair spinal compression fractures usually caused by osteoporosis on an outpatient basis.
According to the Justice Department, the False Claims Act lawsuit filed by Patrick and Bates has resulted to date in approximately $105 million being recovered from more than 130 hospitals. In most cases, kyphoplasty can be performed safely and effectively as an outpatient procedure without any need for a more costly inpatient hospital admission. However, almost all of the hospitals that settled with the Justice Department in December and in previous settlements routinely billed Medicare for kyphoplasty as inpatient procedures rather than as outpatient procedures, strictly to increase Medicare reimbursements.
Patrick, the former reimbursements manager for Kyphon, and Bates, a former regional sales manager for Kyphon in Birmingham, Ala., received an award of $4.75 million as their share in the latest round of settlements. The men have received multiple multi-million whistleblower awards since federal prosecutors chose to intervene in the case, including a $14-million award in 2008 when Kyphon (now a part of Medtronic) settled with the federal government for $75 million. U.S. Attorney William J. Hochul Jr., who helped prosecute the case, had this to say:
As has been shown throughout this successful investigation, we will never allow hospitals to put profits ahead of patients. Decisions regarding potential procedures should be made using sound medical judgment only, not with an eye toward increasing Medicare reimbursements.
This is just another example of how important the whistleblowers are. Without them, wrongdoers in Corporate America get away with massive frauds, costing U.S. taxpayers hundreds of millions of dollars.
Sources: U.S. Department of Justice, CBS News, Law360
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