Alabama hospital, former executive settle false billing case

An Alabama hospital and one of its former executives are among a group of defendants who agreed to pay a combined $1.45 million to resolve false claims allegations, according to the Department of Justice.

Vaughan Regional Medical Center in Selma, Ala., part of Brentwood, Tenn.-based LifePoint Health, along with Integrity Emergency Care, Phillip Alan Hicks, MD, and Sai S. Namburu, MD, entered into the settlement. Dr. Hicks, Vaughan Regional Medical Center's former chief of staff and director of emergency services, owned and operated Integrity Emergency Care.

An investigation by the federal government from mid-2009 to March 31, 2012, revealed residents were recruited from UAB-Selma Family Medicine Residency Program to treat patients in Vaughan Regional Medical Center's emergency department. Though the residents were not fully licensed and credentialed physicians, they were paid $50 per hour cash to treat patients in the hospital's ER. Licensed physicians were also paid an extra $50 per hour to co-sign the residents' charts.

"This illegal moonlighting was perpetuated by falsifying medical records and submitting false claims to Medicare as if the services were provided by licensed physicians," the Justice Department said in a news release.

A physician originally brought the allegations in a lawsuit filed under the qui tam, or whistle-blower, provision of the False Claims Act. The physician alleged residents were independently covering shifts in Vaughan Regional Medical Center's ER. He claimed officials from the hospital and LifePoint took no action after he warned them about the illegal use of residents, according to the Justice Department.

Regarding the settlement, Vaughan Regional Medical Center sent the following statement to WSFA 12:

"Vaughan disputes the allegations in the lawsuit and the government's investigation and believes that it has acted in compliance with applicable laws and regulations pertaining to its Emergency Department at all relevant times. The portion of the settlement paid by Vaughan stems from alleged conduct by a third-party staffing company whose contractual relationship with Vaughan ended in 2012. The decision to enter into the settlement agreement is based solely on Vaughan's desire to avoid the cost and distraction of litigation and to allow Vaughan to focus on its mission of serving the healthcare needs of the residents of Selma and surrounding communities."

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