Banner Health to pay $18 million lawsuit to settle False Claims Act
Banner Health will pay $18 million to settle a federal False Claims Act lawsuit accusing the not-for-profit health system of admitting Medicare patients who could have been treated as outpatients, according to the U.S. Justice Department.
The government charged Phoenix-based Banner with knowingly overcharging Medicare patients and billing the government for short-stay, inpatient procedures that should have been handled on a less costly outpatient basis. The claims are for patients seen from November 2007 through December 2016 at 12 of Banner’s hospitals in Arizona and Colorado. The department also said Banner inflated the number of hours that patients received outpatient observation care during that time period. The settlement resolves those allegations.
Banner, which operates 28 acute-care hospitals, entered into a five-year corporate integrity agreement with HHS’ Office of Inspector General that requires the system to retain an independent review organization to monitor the accuracy of its claims for services provided to patients covered under federal healthcare programs.
Former Banner employee Cecilia Guardiola filed the lawsuit under the False Claims Act’s whistle-blower provisions, and will receive roughly $3.3 million, according to the Justice Department.
Banner spokeswoman Becky Armendariz wrote in an email that the health system is fully committed to adhering to legal and regulatory requirements.
Banner reported operating income of nearly $269 million in 2017 on $7.8 billion revenue, up 71% from income of $157 million on revenue of $7.6 billion in the previous year, according to Modern Healthcare’s financial database. The system’s net income grew at an even faster clip, from $269 million in 2016 to $709 million last year, a nearly 164% jump.