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Minnesota Hospitals to Pay U.S. $2.28 Million to Settle False Claims Act Allegations
Date:5/21/2009

WASHINGTON, May 21 /PRNewswire-USNewswire/ -- Three HealthEast Care System hospitals have agreed to pay the United States $2.28 million to settle allegations that the health care facilities submitted false claims to Medicare, the Justice Department announced today. All three hospitals are located in the Minneapolis-St. Paul, Minn., area.

The settlement resolves allegations that the St. Paul-based hospitals overcharged Medicare from 2002 to 2007 by thousands of dollars each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. The procedure can be performed safely as an outpatient surgery, but the government contends that the HealthEast hospitals performed the procedure on an inpatient basis in order to increase their Medicare billings.

"The Department of Justice is committed to ensuring that Medicare dollars are spent appropriately, and we will prevent Medicare providers from profiteering by providing unnecessary services," said Tony West, Assistant Attorney General for the Department's Civil Division.

The settlement with HealthEast follows 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 inpatient procedure even though the minimally-invasive procedure should have been done in many cases as an outpatient procedure.

"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.

St. Joseph's Hospital, St. John's Hospital and Woodwinds Hospital - all part of the HealthEast Care System - are the first hospitals to sett
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SOURCE U.S. Department of Justice
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