KHI News Service

Hospital companies settle Medicare billing dispute

By Dave Ranney | July 03, 2013

The parent companies of two Kansas hospitals have agreed to pay the federal government almost $9.7 million to settle allegations that they had frequently billed Medicare for an inpatient procedure that could have been performed safely and effectively in an out-patient setting.

The two companies were Hospital Corporation of America, which owns Wesley Medical Center in Wichita, and Lifepoint Hospitals, Inc., which owns Western Plains Medical Complex in Dodge City.

The billings were for kyphoplasty, a minimally invasive procedure used to treat spinal fractures often associated with osteoporosis.

The agreement, announced earlier this week, stemmed from U.S. Department of Justice allegations that, nationwide, more than 100 hospitals had performed the procedures in “more costly” inpatient settings in order to increase their Medicare billings.

“Whenever hospitals knowingly overcharge Medicare, critically needed resources are wasted and health costs are driven up,” Daniel Levinson, inspector general for the U.S. Department of Health and Human Services, said in a prepared statement. “When taxpayers’ dollars are threatened, OIG (Office of Inspector General) and its federal partners will take action.”

Diane Huggins, vice president in charge of corporate communications at Life Point Hospitals, said the billing errors were unintentional.

“When we became aware of a kyphoplasty billing issue at one of our hospitals, we proactively conducted a thorough review of case files across our hospitals at which physicians performed this procedure from 2000 to 2009,” Huggins wrote in an email to KHI News Service. “As a result of this review, we self-reported all kyphoplasty-related billing errors we identified to the Department of Justice, and five additional hospitals were added to the settlement now being announced.

“We agreed with the Department of Justice to return to Medicare all funds our hospitals should not have received as a result of the billing mistake,” she said.

Ed Fishbough, a spokesperson for Hospital Corporation of America, said the company was pleased with the settlement agreement.

“We are pleased to see new clarification of industry care standards, which help physicians make decisions regarding kyphoplasty patients,” he said.

The latest settlement involved 55 hospitals in 21 states agreeing to pay $34 million.

According to a U.S. Department of Justice press release, the allegations were first raised in keeping with the False Claims Act, which permits “whistleblowers” to bring lawsuits on behalf of the United States and receive a portion of any settlement proceeds.

In the kyphoplasty case, the two whistleblowers will divide approximately $5.5 million.

The KHI News Service is an editorially independent initiative of the Kansas Health Institute. It is supported in part by a variety of underwriters. The News Service is committed to timely, objective and in-depth coverage of health issues and the policy-making environment. All News Service stories and photos may be republished at no cost with proper attribution, including a link back to when a story is reposted online. An automatically updated feed of headlines and more from KHI can be included on your website using the KHI widget. More about the News Service at or contact us at (785) 233-5443.