Norwalk Hospital to pay nearly $1M to settle false claims allegations

Norwalk Hospital in Fairfield County, Conn., has agreed to pay the federal government $920,000 to settle accusations that it falsely billed Medicare while treating patients for osteoporosis, according to the Connecticut Law Tribune.

The U.S. Justice Department claimed the hospital submitted false claims to Medicare for kyphoplasty procedures — a minimally invasive procedure used to treat certain spinal fractures that are often caused by osteoporosis. The procedure can generally be performed on an outpatient basis without the need for admission to the hospital. However, officials claim Norwalk Hospital billed Medicare for kyphoplasty procedures on a more costly inpatient basis to increase its revenues from Medicare beneficiaries.

According to the report, 31 other hospitals in 15 states have agreed to pay the federal government a combined $28 million to settle allegations over fraudulent billing for kyphoplasty procedures. More than 130 healthcare facilities nationwide are paying the federal government $105 million to settle similar allegations.

"The hospital cooperated fully with this investigation that focused on inpatient versus outpatient treatment decisions," Joseph Campbell, chief compliance officer for the Western Connecticut Health Network, said in a statement on behalf of Norwalk Hospital, according to the report. "Our hospital is one of more than 130 hospitals across the country [that has] agreed to settle this dispute with the government. Our intent is to always provide the best possible care for our patients while following all of the government's regulatory guidelines for submitting accurate bills for reimbursement."

The lawsuit was filed by Craig Patrick and Charles Bates in U.S. District Court in Buffalo, N.Y., two whistleblowers under the qui tam provision of the False Claims Act. Mr. Patrick is a former reimbursement manager for Kyphon, the company that produced the balloon device used to perform kyphoplasty, and Mr. Bates was previously a regional sales manager for Kyphon in Birmingham, Ala. The two whistleblowers will receive approximately $4.75 million from the settlements.

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