Three HealthEast Hospitals Will Pay $2.28 Million For Fraudulent Policy

On Thursday, May 21, the Department of Justice announced a $2.28 million settlement between three HealthEast Care System hospitals and the United States. It was alleged that the hospitals, all of which are located in the Minneapolis/St. Paul area of Minnesota, performed kyphoplasties on an inpatient basis in order to increase their Medicare billings.

Kyphoplasties, which are minimally-invasive procedures used to treat osteoporosis-evoked spinal fractures, are typically performed on an outpatient basis. “Outpatient” procedures do not require admission to a hospital and can even be performed outside hospital facilities. By performing kyphoplasties on an inpatient basis, patients were unnecessarily admitted to the hospital and closely monitored before, during, and after the procedure. 

In this fashion, the hospitals overcharged Medicare thousands of dollars for each kyphoplasty they performed.

“By keeping patients overnight, hospitals could seek greater reimbursement from Medicare and make much larger profits on kyphoplasty,” said Kathleen Mehltretter, Acting U.S. Attorney for the Western District of New York in Buffalo.

The whistleblower suit was brought 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. The lawsuit was filed in 2008 in federal district court in Buffalo, N.Y. by Craig Patrick and Charles Bates. Mr. Patrick of Hudson, Wis., is a former reimbursement manager for Kyphon, and Mr. Bates was formerly a regional sales manager for Kyphon in Birmingham, Ala.

If you are witnessing fraud on the government, contact us by calling 800-377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.