Dignity Health to pay $37M to settle False Claims Act case

San Francisco-based Dignity Health has agreed to pay $37 million to settle allegations 13 of its hospitals knowingly submitted false claims to Medicare and TRICARE, according to the Department of Justice.

The settlement resolves allegations the Dignity hospitals, which are located in California, Nevada and Arizona, submitted claims for inpatient services for patients who could have been treated on an outpatient basis.

Specifically, the government alleged from 2006 through 2010 the 13 hospitals billed Medicare and TRICARE for inpatient care for certain patients who underwent elective cardiovascular procedures, such as stents and pacemakers, when the claims should have been billed as less costly outpatient surgeries, according to the report.

The government further alleged from 2006 to 2010 the Dignity hospitals unnecessarily admitted patients for common medical diagnoses when care could have been provided in an outpatient or observation setting.

Along with paying the $37 million settlement, Dignity has entered into a corporate integrity agreement with HHS' Office of the Inspector General, which requires Dignity to engage in significant compliance efforts over the next five years, according to the report.

The lawsuit against Dignity was filed under the qui tam, or whistle-blower, provisions of the False Claims Act by Kathleen Hawkins, a former Dignity employee. She will receive approximately $6.25 million as her portion of the settlement.

Although Dignity entered into this agreement, there has been no admission of wrongdoing.

More articles on healthcare industry lawsuits:

Why suing physicians over errors in Ebola diagnosis will be difficult in Texas
DaVita to pay $389M to settle False Claims, Kickback case
Illinois dermatologist convicted of submitting false claims for 800 patients


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