Penn Medicine to Pay $275,000 to Resolve False Claims Act Allegations

by Andrew Murray | July 10th, 2019

On June 26, 2019, the Department of Justice announced that a settlement was reached with the Trustees of the University of Pennsylvania Health System (“Penn Medicine”). The settlement resolves allegations that LGH-MFM (the division of Maternal Fetal Medicine at Lancaster General Hospital) violated the False Claims Act by submitting false obstetric ultrasound claims to Medicaid. The Press Release states:

United States Attorney William McSwain announced today that the Trustees of the University of Pennsylvania Health System (“Penn Medicine”) agreed to settle allegations under the False Claims Act that the Lancaster General Hospital’s division of Maternal Fetal Medicine (LGH-MFM), a component of Penn Medicine, submitted false claims to Medicaid for obstetric ultrasounds.

The government alleges that, from approximately May 1, 2017 through December 31, 2017, LGH-MFM had insufficient physician staff to properly handle its patient volume. As a consequence, the government alleges that during this period, LGH-MFM physicians failed to timely complete professional reports interpreting many of the ultrasound studies that they ordered for their obstetric patients. Such a timely report is required for Medicaid to reimburse a physician for professional interpretation of an ultrasound. Further, extreme delays in completing such a report can render the report and interpretation worthless.

Specifically, the government alleges that in many instances, LGH-MFM physicians did not finalize professional reports of ultrasound studies until more than thirty days after the ultrasound was performed. In over 10% of cases during this time period, the report was not completed until more than 90 days after the ultrasound was performed, and in some cases not until after the patient delivered. The government alleges that LGH-MFM violated the False Claims Act by nevertheless submitting claims for reimbursement to Medicaid for ultrasound interpretations when it knew or should have known the claims were not reimbursable due to the extreme delays in completing the physician’s reports.

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The present case was not brought under the False Claims Act’s qui tam provision. Instead, the investigation was prompted by a citizen’s tip.

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