Three Minnesota Hospitals Pay $2.28M to Settle Medicare Fraud Allegations

Three hospitals in the St. Paul, Minn.-based HealthEast Care System agreed to pay the United States $2.28 million to settle allegations that they submitted false claims to Medicare, according to a U.S. Department of Justice news release.

According to the lawsuit, St. Joseph's Hospital, St. John's Hospital and Woodwinds Hospital, all located in the St. Paul-Minneapolis region, overcharged Medicare from 2002 to 2007 by thousands of dollars for kyphoplasty, a minimally invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. Kyphoplasty can be performed safely as an outpatient surgery, according to the release, but the government believes that the hospitals performed the procedure on an inpatient basis in order to increase their Medicare billings.

The hospitals previously paid $1.45 million after a self-audit determined that they had overbilled Medicare for inpatient kyphoplasty claims that should have been billed as outpatient procedures, which has been credited against the total settlement.

The three HealthEast hospitals are the first to settle Medicare fraud allegations related to kyphoplasty. The government previously settled with Medtronic Spine, the corporate successor to Kyphon, after it alleged that Medtronic was counseling hospitals to perform the procedure on an inpatient basis when it could be performed in many cases as an outpatient procedure, according to the report.

The 2008 whistleblower lawsuit against the hospitals was filed under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant, by two former Kyphon employees.

Read the DOJ release about the HealthEast hospitals Medicare fraud settlement.

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