Sharp Memorial Hospital Agrees To Pay $6.2 Million To Settle Medicare Fraud Case
A U.S. attorney yesterday announced San Diego-based Sharp Memorial Hospital will pay the federal government $6.2 million to settle a lawsuit alleging it misrepresented costs related to heart and kidney transplants to overcharge Medicare, the San Diego Union-Tribune reports. Under the settlement reached with the U.S. Attorney's Office for San Diego and the Department of Justice, Sharp will admit no wrongdoing but will implement a five-year "Corporate Integrity Agreement" to ensure regulatory compliance through staff training, independent billing reviews and cost-reporting procedures (Clark, San Diego Union-Tribune, 3/7). The case marks the third Medicare fraud lawsuit that Sharp HealthCare, the owner and operator of Sharp Hospital and three other facilities, has settled since 1999, the AP/Ventura County Star reports. The charges stem from a whistleblower lawsuit filed by Sharp Hospital nurse Judy King in 2000, alleging that Sharp fraudulently charged Medicare for salaries of employees who spent as little as 10% of their time on the job working with heart or kidney transplants (Hettena, AP/Ventura County Star, 3/6). The suit also accused Sharp of misrepresenting medical director fees, laboratory charges and square footage as part of organ acquisition activities to qualify for Medicare reimbursement, the Union-Tribune reports. Michael Murphy, president and CEO of Sharp, said in a statement that the company "acknowledges certain errors were made in the preparation of the cost reports" but added, "[W]e believe there was an honest difference of interpretation or application of complex regulations and reimbursement rates." King's lawsuit had alleged that "inconsistencies" existed between how staff time was spent and how it was logged in order to charge Medicare higher amounts, the Union-Tribune reports. King's suit will be dismissed as part of the settlement, although she will receive 20% of what the government recovers from Sharp -- about $1.2 million before taxes and legal fees -- under the federal False Claims Act (San Diego Union-Tribune, 3/7).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.