Indiana and Alabama Hospitals To Pay U.S. Over $8 Million for Medicare Fraud

Six hospitals in Indiana and Alabama have agreed to pay the United States more than $8 million to settle allegations that the health care facilities submitted false claims to Medicare, the Department of Justice announced on September 29, 2009.

The Indiana hospitals include St. Francis Hospital in Beech Grove, Deaconess Hospital in Evansville and St. John’s Hospital System in Anderson. The hospitals have agreed to pay the United States $3,158,629, $2,110,034 and $826,256, respectively.

The Alabama hospitals include St. Vincent’s East Hospital and St. Vincent’s Birmingham Hospital, both located in Birmingham, and Providence Hospital, located in Mobile. These facilities have agreed to pay the United States $1,459,395, $422,748 and $381,713, respectively.

The settlements resolve allegations that, from 2002 to 2008, the six hospitals overcharged Medicare each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. In many cases, the procedure can be performed safely as an out-patient surgery, but the government contends that the hospitals performed the procedure on an in-patient basis in order to increase their Medicare billings.

This lawsuit was filed in 2008 in federal district court in Buffalo, N.Y., by Craig Patrick and Charles Bates under the qui tam or whistleblower provisions of the False Claim Act. Under those provisions, a private party, known as “relator,” can file an action on behalf of the United States and receive a portion of any recovery. Mr. Patrick, of Hudson, Wis., is a former reimbursement manager for Kyphon, and Mr. Bates is a former regional sales manager for Kyphon in Birmingham, Ala. The relators will receive approximately $1.4 million as their share of the settlement proceeds.

The settlements with these Indiana and Alabama facilities follow the government’s June 2009 settlement with three Minnesota hospitals for alleged kyphoplasty-related Medicare fraud claims, as well as the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an in-patient procedure.

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.

Pharmaceutical Giant Still Battling States Over Fraud

On September 29, 2009, Legal Newsline published an update on a multi-state case involving Eli Lilly & Co. In the case, the states argued that the pharmaceutical giant promoted off-label uses for the drug, Zyprexa, and also claimed the drug’s side effects overburdened their Medicaid programs.

So far, eight of the 12 states with cases have settled with Eli Lilly on the same terms, with differing monetary values according to state population. These states include West Virginia, Connecticut, Minnesota, Montana, New Mexico, Louisiana, Utah and Idaho. The four states yet to reach agreements are Arkansas, Mississippi, Pennsylvania and South Carolina.

Eli Lilly has already settled consumer protection claims with 33 other states for $62 million, and also agreed to pay $1.4 billion to settle federal civil and criminal claims stemming from the alleged off-label marketing.

The payment also benefited the Medicaid programs of more than 30 states that received approximately $362 million, collectively.

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.