Arizona Hospital Network Carondelet, Corp. Pays $35 Million to Settle Healthcare Fraud Claims

In yet another healthcare fraud case, a prominent Arizona-based hospital management company has agreed to remit $35 million to settle allegations of improper billing procedures. Earlier this month, Carondelet Health Network – which manages Carondelet St. Mary’s Hospital and Carondelet St. Joseph’s Hospital, both in the Tuscon area – agreed to settle claims brought forth by a whistleblower alleging upcoding and medically unnecessary inpatient admittance. Carondelet has not admitted liability in the matter, and further asserts that it self-reported the alleged healthcare fraud in 2011.

Details of Billing Problems

Despite Carondelet’s description of the problem as a “technical billing error,” the federal government and its investigation revealed millions of dollars’ worth of medically unnecessary inpatient treatment for medical issues that could have just as easily been treated on an outpatient basis. Under Medicaid, Medicare, and the Arizona Health Care Cost Containment System rules, certain criteria must be met before a patient can be admitted to a hospital for treatment on an inpatient basis. Under current guidelines as set forth by the Centers for Medicare and Medicaid Services, a physician must set forth all of the following information before an inpatient stay is reimbursable:

• Hospital inpatient services are reasonable and necessary for the treatment of the patient’s particular condition;
• Inpatient services are either (i) medically required for a diagnostic study, or; (ii) special or unusual for certain “outlier” cases;
• An estimated amount of time the patient is expected to remain hospitalized;
• Plans for post-hospital care, and;
• Any applicable information available at the time of admittance with regard to an expected transfer to a skilled nursing facility.

Providing false information in any of these categories, or failing to provide information, could result in either a denial of the claim or an unlawful reimbursement, which must be repaid within 60 days of discovery of the problem. Unfortunately, the facts of the Carondelet case do not specifically reveal examples of how the hospital systems circumvented these rules; however, a courageous whistleblower with first-hand information of the problem was eventually able to come forward with her information about the unlawful billing procedures – and is expected to receive over $5 million for her integrity.

Contact a Reputable Whistleblower Lawyer Today

Healthcare fraud is so commonplace that it comprises the vast majority of settlements under the False Claims Act. If you are aware of possible fraud, billing issues, or kickbacks either by your own medical practitioner or your employer, we encourage you to contact us today. Plaintiffs filing suit under the False Claims Act can obtain anywhere from 10 to 30 percent of the ultimate recovery – which as today’s case shows, can be substantial. For more information, contact Berger Montague today.