Catholic Healthcare West to Pay $10.75M for False Medicare Claims
Four Catholic Healthcare West hospitals will pay $10.75 million to settle charges resulting from a 1994 civil suit that accused the hospitals of improperly billing Medicare for experimental cardiac devices, the Sacramento Bee reports. The original suit was filed after "whistle-blower" Kevin Cosens, a medical device salesperson, alerted Medicare officials of improper billing at Mercy General Hospital in Sacramento, Sequoia Hospital District in Redwood City, Seton Medical Center in Daly City and St. Joseph's Hospital in Phoenix, Ariz. The settlement was part of a False Claims Act investigation into 130 hospitals nationwide that "allegedly submitted fraudulent bills." The suit concerns the hospitals' use of pacemakers, defibrillators and arterial catheters that were not approved by the FDA from 1986 to 1994. Donald Warren, Cosens' attorney, said that the hospitals used billing codes for FDA-approved devices to submit claims for experimental procedures, "often in a deliberate attempt to obscure the type of care." Warren added that physicians at the hospitals had "financial ties" to the companies making the devices they used. According to Mercy spokesperson Jill Dryer, however, the "rules were anything but clear" on how to file for reimbursement. Dryer said that when the rules changed in 1986, "spell[ing] out a ban on payment for experimental care," administrators at the hospitals "were not sure how to interpret the revised rules" (Rapaport, Sacramento Bee, 8/10). According to the San Francisco Chronicle, the federal government has received $18 million in settlements from hospitals accused of similar charges (Baker, San Francisco Chronicle, 8/10).