Hospital corporation Banner Health pays $18 million in fraud settlement

by Ben Vernia | April 17th, 2018

On April 12, the Department of Justice announced that Banner Health had agreed to pay $18 million to settle civil allegations, originally brought by a whistleblower, that the company’s Arizona and Colorado hospitals submitted false claims for unnecessary inpatient admissions. According to DOJ’s press release:

Banner Health has agreed to pay the United States over $18 million to settle allegations that 12 of its hospitals in Arizona and Colorado knowingly submitted false claims to Medicare by admitting patients who could have been treated on a less costly outpatient basis, the Justice Department announced today.  Headquartered in Arizona, Banner Health owns and operates 28 acute-care hospitals in multiple states.

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The settlement resolves allegations that 12 Banner Health hospitals knowingly overcharged Medicare patients unnecessarily.  In particular, the United States alleged that from Nov. 1, 2007 through Dec. 31, 2016, Banner Health billed Medicare for short-stay, inpatient procedures provided at the 12 hospitals that should have been billed on a less costly outpatient basis.  The settlement also resolves allegations that Banner Health inflated in reports to Medicare the number of hours for which patients received outpatient observation care during this time period.

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The company also entered into a five-year corporate integrity agreement. DOJ announced that the whistleblower, a former employee, will receive approximately $3.3 million (an 18% relator’s share).

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