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Atrium Medical Center has agreed to pay $4.2 million to the federal government over allegations of improper billing of Medicare claims.
The settlement stems from a national investigation that began as a whistleblower lawsuit. The U.S. Department of Justice announced settlements Tuesday with 55 hospitals in 21 states for more than $34 million including the Middletown hospital.
A settlement was also reached with Mount Carmel New Albany Surgical Hospital in the Columbus area.
Allegations are that the health care facilities submitted improper claims to Medicare for kyphoplasty procedures, the Justice Department said.
Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures often due to osteoporosis.
Kyphoplasty can often be performed safely and effectively as an outpatient procedure without any need for a more costly hospital admission, the Justice Department said. The agreements announced Tuesday stem from allegations the settling hospitals “frequently” billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, to increase their Medicare billings, according to the government.
From January 2000 to June 2009, Atrium Medical performed 495 of these back surgery cases, said hospital President and Chief Executive Officer Carol Turner. The procedures were all medically necessary, Turner said.
“The issue around this procedure is whether they should be performed as an inpatient or an outpatient,” Turner said. “Atrium provided the care to the patients based on physician orders. The government, however, disagreed with the site of service. They felt it should have been done as an outpatient rather than an inpatient,” Turner said.
An outpatient procedure sends patient home the same day.
Atrium hospital officials received noticed from the federal justice department in 2010, by which time an internal audit conducted by Atrium had already determined the issue.
As a result of a federal audit, Atrium was required to pay the difference between what the hospital billed for the inpatient services and the outpatient cost. Because this was considered a billing error, there was also a penalty involved, Turner said. The payment was made earlier this year, she said.
“Understand that when this was done, Medicare was paying for this,” she said. “This is one of those things where everybody thought they were doing the right thing and it was billed wrong.”
The Justice Department said in the release it has reached settlements totaling $75 million with more than 100 hospitals to resolve allegations that they mischarged Medicare for kyphoplasty procedures.
In addition, a settlement was previously reached with Medtronic Spine LLC, the corporate successor to Kyphon Inc., which makes medical equipment, for $75 million. Kyphon allegedly counseled hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient, the Justice Department said.
Atrium is operated by Dayton-based health system Premier Health.
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