California Accuses Sutter Health of Overbilling More Than $100M for Anesthesia

Written by Molly Gamble (Twitter | Google+)  | April 14, 2011 | Print |

California's insurance commissioner has filed to intervene in a whistleblower lawsuit accusing Sacramento, Calif.-based Sutter Health, a 24-hospital system, of falsely billing for millions of dollars of anesthesia services, according to a California Department of Insurance news release.

The case was first filed by Rockville Recovery Associates Limited, which discovered a fraudulent scheme after reviewing bills submitted to a private insurer by Sutter Hospitals.

Commissioner Dave Jones alleges that Sutter Hospitals submitted false bills for anesthesia services provided during operating room procedures. More specifically, the hospital system allegedly used an anesthesia billing code to charge for services and supplies patients and payors had already paid for through other charges on the hospital bill or anesthesiologist's bill. Commissioner Jones seeks monetary penalties and damages as well as broad injunctive relief to stop fraudulent billing practices.

"Sutter's alleged fraud comes at the expense of the private health insurance industry, which initially pays for the services, but, ultimately, this unjust burden falls on the shoulders of California's consumers, who must foot the bill for inflated healthcare premiums," Commissioner Jones said in the release. "We believe the amount of the fraudulent charges is in the hundreds of millions of dollars, if not more."

The case will be decided by a jury in Sacramento.

Read the news release on Sutter Hospitals.

Read about other hospitals and health systems involved in fraud:

- North Carolina's Rex Hospital Pays $1.9M to Settle Medicare Fraud Allegations

- Tenet Sues CHS: New Battle Lines in Healthcare Takeovers — Whistleblowing

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