Baptist part of Medicare fraud settlement
Has $691K share of overall $34M payment
Baptist Memorial Health Care Corp. hospitals in Memphis, Collierville and Mississippi are among 55 in 21 states involved in a $34 million settlement of a Medicare fraud case announced Tuesday by the Justice Department.
Baptist agreed to pay a total of $691,168 to the federal government stemming from allegations that the hospitals inflated charges for kyphoplasty, a procedure for treating spinal fractures often caused by osteoporosis.
The government’s investigation was triggered by a “whistle blower” lawsuit filed in 2008 by former employees of Kyphon Inc., a California company purchased the previous year by Memphis-based Medtronic Spine. Medtronic, using funds previously set aside by Kyphon, settled with the government for $75 million in 2008.
Tuesday’s announcement brings the total number of hospitals that have settled to more than 100 and the total settlement amount to about $75 million.
“This office will continue to ensure that sound medical decisions determine the ultimate treatment of a patient, not the financial interests of hospitals,” Western District of New York U.S. Atty. William Hochul said in a statement.
The whistle blowers who filed suit in Buffalo, N.Y., contended that Kyphon representatives persuaded hospitals to perform kyphoplasty in hospitals, where the Medicare bill would be higher, rather than as an outpatient procedure. Kyphon sold the equipment and materials for the procedure, according to Phillips & Cohen LLP, the law firm that represented the former Kyphon employees.
Baptist Memorial Health Care officials pointed to continuing costly legal action in a statement provided by a Baptist spokeswoman, Ashley Compton.
The three hospitals involved were Baptist Memorial Hospital-Memphis, Baptist Memorial Hospital- Collierville and Baptist Memorial Hospital- Golden Triangle in north Columbus, Miss.
“More than 100 hospitals, including ours, are involved in a settlement because we allowed patients to stay overnight in the hospital following a new spinal procedure,” said the statement. “Medicare maintains that the procedure should have been performed on an outpatient basis instead. We chose to settle the dispute instead of pursuing more costly legal action.”
A Medtronic Spine spokesman, Eric Epperson, noted in a statement that Kyphon agreed to settle the case with the Justice Department before its acquisition by Medtronic.
“The settlement agreement reflects the company’s assertion that Kyphon and its employees had not engaged in any wrongdoing or illegal activity,” the statement said. “Patient safety and integrity are our top priorities at Medtronic, and we are committed to ensuring ethical business practices.
The whistle blowers, former Kyphon reimbursement manager and former regional sales manager Craig Patrick and Chuck Bates, will receive about $5.5 million of latest settlement as part of their reward under the federal False Claims Act, Justice Department officials said.