32 more hospitals settle kyphoplasty allegations in long-running case

by Ben Vernia | January 5th, 2016

In the latest in a series of settlements dating back to 2010, the Department of Justice announced on December 18 that 32 additional hospitals have agreed to pay in excess of $28 million to settle civil allegations that they submitted false claims in connection with the orthopedic surgical procedure kyphoplasty. According to DOJ’s press release:

Thirty-two hospitals located throughout 15 states have agreed to pay the United States a total of more than $28 million to settle allegations that the health care facilities submitted false claims to Medicare for minimally-invasive kyphoplasty procedures, the Justice Department announced today.  The Justice Department has now reached settlements with more than 130 hospitals totaling approximately $105 million to resolve allegations that they mischarged Medicare for kyphoplasty procedures.

Kyphoplasty is a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis.  In many cases, the procedure can be performed safely and effectively as an outpatient procedure without any need for a more costly inpatient hospital admission.  The settlements announced today resolve allegations that the 32 settling hospitals frequently billed Medicare for kyphoplasty procedures on a more costly inpatient basis, rather than an outpatient basis, in order to increase their Medicare billings.

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The settling facilities and the amounts they have agreed to pay, include the following:

  • The Cleveland Clinic in Cleveland, Ohio, has agreed to pay $1.74 million.
  • Citrus Memorial Health System in Inverness, Florida, has agreed to pay $2.6 million.
  • Cullman Regional Medical Center in Cullman, Alabama, has agreed to pay $350,000.
  • Martin Memorial Medical Center in Stuart, Florida, has agreed to pay $2 million.
  • MultiCare Tacoma General Hospital in Tacoma, Washington, has agreed to pay $983,000.
  • Norwalk Hospital in Norwalk, Connecticut, has agreed to pay $920,000.
  • Princeton Community Hospital Association in Princeton, West Virginia, has agreed to pay $1,513,500.
  • Sacred Heart Medical Center in Spokane, Washington, has agreed to pay $906,000.
  • Sarasota Memorial Hospital in Sarasota, Florida, has agreed to pay $972,000.
  • Spartanburg Regional Health Services District Inc. in Spartanburg, South Carolina, has agreed to pay $1.725 million.
  • St. Cloud Hospital in St. Cloud, Minnesota, has agreed to pay $500,000.
  • Tampa General Hospital in Tampa, Florida, has agreed to pay $2 million.
  • Five hospitals affiliated with Community Health Systems Inc., in Franklin, Tennessee, have agreed to pay a total of $3.5 million.These include:Crestwood Medical Center in Huntsville, Alabama; St. Joseph’s Hospital in Fort Wayne, Indiana; Carolinas Hospital System in Florence, South Carolina; Mary Black Health System in Spartanburg, South Carolina; and Trinity Medical Center in Birmingham, Alabama.
  • Five hospitals affiliated with Tenet Health Care Corporation in Dallas, Texas, have agreed to pay a total of $2.2 million. These include:East Cooper Medical Center in Mt. Pleasant, South Carolina; North Fulton Hospital in Roswell, Georgia; Providence Memorial Hospital in El Paso, Texas; St. Francis Hospital in Memphis, Tennessee; and Sierra Medical Center in El Paso.
  • Five hospitals formerly owned and operated by Health Management Associates Inc., in Naples, Florida, have agreed to pay a total of $2 million.These include:Biloxi Regional Medical Center in Biloxi, Mississippi; Davis Regional Medical Center in Statesville, North Carolina; Lancaster Regional Medical Center in Lancaster, Pennsylvania; Physicians Regional Medical Center in Naples, Florida; and Riley Hospital in Meridian, Mississippi.
  • Three hospitals affiliated with BayCare Health System in Clearwater, Florida, have agreed to pay a total of $1.5 million.These include:Winter Haven Hospital in Winter Haven, Florida; St. Joseph’s Hospital in Tampa, Florida; and St. Anthony’s Hospital in St. Petersburg, Florida.
  • Two hospitals affiliated with Banner Health in Phoenix, Arizona, have agreed to pay a total of $2.685 million.These include Banner Boswell Medical Center in Sun City, Arizona, and Banner Thunderbird Medical Center in Glendale, Arizona.

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In addition to settlements with over 130 hospitals, the government previously settled with Medtronic Spine LLC, the corporate successor to Kyphon Inc., for $75 million to settle allegations that the company caused false claims to be submitted to Medicare by counseling hospital providers to perform kyphoplasty procedures as inpatient rather than outpatient procedures.

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All but three of the cases had been brought by two former employees of Kyphon, Inc., who will receive $4.75 million of this round of settlements (a relator’s share of approximately 17%).

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