Nine Hospitals Agree to Pay More Than $9.4M to Resolve Kyphoplasty-Related False Claims Allegations

Nine hospitals in seven states have agreed to pay the United States more than $9.4 million to settle allegations that they submitted false claims to Medicare related to kyphoplasty procedures performed between 2000 and 2008, according to a U.S. Department of Justice news release.

The hospitals were accused of performing kyphoplasty, a minimally invasive procedure used to treat certain spinal fractures, as an inpatient procedure in order to increase Medicare billings when many of the cases could have been performed on a less-costly outpatient basis.

The nine hospitals to settle and the amount they have agreed to pay are as follows:
  • Ball Memorial Hospital (Muncie, Ind.) —  $1,995,431
  • Bethesda Memorial Hospital (Boynton Beach, Fla.) — $356,079
  • Bloomington (Ind.) Hospital  — $1,443,848
  • Genesys Regional Medical Center (Grand Blanc, Mich.) — $931,742
  • Huntsville (Ala.) Hospital  — $1,992,756
  • Palmetto Health (Columbia, S.C.) — $1,861,083
  • St. Elizabeth Medical Center (Utica, N.Y.) — $195,976
  • St. Mary's of Michigan Hospital (Saginaw, Mich.) — $260,065
  • United Hospital (St. Paul, Minn.) — $428,656

The settlement with these facilities follows settlements that the government reached in May and Sept. 2009 with nine other hospitals for alleged kyphoplasty-related Medicare fraud claims, as well as the government's May 2008 settlement with Medtronic Spine, Kyphon's parent company. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an inpatient procedure, even though in many cases the minimally invasive procedure should have been done on an outpatient basis.

All but two of the settling facilities — St. Elizabeth Medical Center and United Hospital — were named as defendants in a lawsuit filed under the False Claims Act in 2008 in federal district court in Buffalo, N.Y., whistleblowers Craig Patrick and Charles Bates. Mr. Patrick is a former reimbursement manager for Kyphon and Mr. Bates is a former regional sales manager for Kyphon.

Read the DOJ's release on the kyphoplasty settlements.

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