CHW Settles Medicare, Medi-Cal Fraud Suit for $10.25M
Catholic Healthcare West has agreed to pay $10.25 million to settle a whistle-blower lawsuit alleging that the hospital chain's Mercy Healthcare Sacramento unit inflated Medicare and Medi-Cal reimbursement claims, the Sacramento Bee reports. The settlement covers allegations that CHW submitted claims for nonreimbursable physical exams, billed physician referrals as "more expensive" consultations and filed claims for "undocumented" lab work. Attorneys for George Baca, a former CHW employee, filed the case in 1998. After noticing Medicare claims that he considered to be "inflat[ed]," Baca notified superiors and was allegedly told "not to communicate with anyone ... concerning compliance of Medicare billing issues." As part of the settlement, Baca will receive $2 million. Assistant U.S. Attorney Michael Hirst said, "This is a case of systematic submissions of false claims. The evidence showed a deliberate choice, made at the highest levels, not to disclose [Medicare overpayments]. The whistle-blower was told not to discuss the false billings with anyone." Under the terms of the settlement, CHW admitted no wrongdoing. William Hunt, CHW's chief operating officer for the Sacramento region, attributed the problem to a series of "billing errors involving two of our affiliates. He added, "We are committed to complying with all applicable government rules and regulations" (Walsh, Sacramento Bee, 5/17).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.