1. In May, a federal judge dismissed a false claims lawsuit against Upstate University Hospital in Syracuse, N.Y., in which a neurosurgeon accused the hospital of Medicare and Medicaid fraud. The neurosurgeon also claimed the hospital violated state labor law by retaliating after he complained by cutting his pay and demoting him. U.S. District Court Judge Thomas McAvoy granted the hospital’s motion to dismiss the complaint because under the False Claims Act, claims against the state are barred by the 11th Amendment.
2. A California state investigation found in May that Prime Healthcare, a California hospital chain under investigation for allegedly overbilling Medicare, inaccurately diagnosed 22 patients with the blood infection septicemia. The probe began in Feb. 2011 after a study of medical records by Service Employees International Union showed that Prime hospitals reported septicemia rates among Medicare beneficiaries at more than three times the national average.
3. In May, a former hospital employee filed a lawsuit accusing St. Luke’s Hospital in Jacksonville, Fla., of falsely billing the government from April 2008 until March 2009. The suit claims the hospital was ineligible for Medicaid and Medicare payments because its accreditation allegedly transferred when St. Vincent HealthCare took over St. Luke’s from former operator Mayo Clinic. St. Luke’s allegedly continued claiming Mayo’s accreditation as its own when it was under St. Vincent HealthCare’s ownership.
4. Agents from the inspector general of the Department of Health and Human Services issued Fort Lauderdale, Fla.-based North Broward Hospital District, also known as Broward Health, a subpoena May 17 to review contracts given to more than 27 physicians for violations of Stark and Anti-Kickback laws. The agents said they issued the subpoena in connection with an investigation over possible false claims to Medicare and Medicaid relating to physician reimbursements.
5. Community Health Systems, based in Franklin, Tenn., said it received the subpoena on May 13 requesting documents related to various inquiries into the company’s billing practices. The practices allegedly resulted in one-day admissions that should have been billed as observation status visits. The hospital operator is also being investigated by the Department of Justice and HHS following a lawsuit by Tenet Healthcare alleging improper billing resulting from the admission practices.
6. In June, a federal judge in Arizona dismissed a whistleblower’s complaint against Franklin, Tenn.-based IASIS Healthcare, which claimed the 19-hospital system paid kickbacks in exchange for referrals. U.S. District Judge Robert Clive Jones rejected the complaint from Jerre Frazier, former vice president of ethics and compliance for IASIS who filed the complaint against IASIS in March 2005. In Jan. 2011, IASIS filed a motion to dismiss Frazier’s complaint and also filed a renewed motion for sanctions concerning Mr. Frazier’s “misappropriation and misuse of privileged documents.”
7. A motion for dismissal was denied by a U.S. district court judge in June, allowing a whistleblower case accusing Daytona Beach, Fla.-based Halifax Health Medical Center of Medicare fraud and kickbacks to continue. In 2009, Halifax’s director of physician services accused the hospital of inappropriately admitting patients, billing Medicare for their services and allegedly having financial relationships with physicians in violation of federal anti-kickback laws.
8. Three former employees at two hospitals within Hollywood, Fla.-based Memorial Healthcare System were accused of participating in a large-scale kickback scheme in June. Adil Osman, former director of facilities management at Memorial Hospital West in Pembroke Pines, Fla., allegedly selected companies in exchange for cash and home improvements. Elliot Gordon and Anthony Merola, former employees of Memorial Regional Hospital in Hollywood, pleaded guilty to a similar kickback scheme with vendors.
9. Divine Providence Hospital in Williamsport, Pa., agreed to pay the federal government $598,965 to resolve allegations of improper Medicare claims in June. The payment will settle allegations that, from Jan. 2004-Dec. 2007, the hospital erroneously submitted Medicare payment claims that contained evaluation and management services not allowable under Medicare.
10. The case against John Reynolds, former CEO of Hospital for Special Surgery in New York City, will proceed after a judge rejected several aspects of a motion to dismiss the suit in July. The suit was filed in 2009 by the former owner of a medical billing company, Healthwave. It claimed Mr. Reynolds, who left HSS in late 2006, solicited kickbacks from vendors in the form of consulting fees. An HHS spokesperson has called the allegations baseless.
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