Banner Health has agreed to pay more than $18 million to settle whistleblower claims that the Phoenix-based health system admitted patients who could have been treated less expensively at outpatient facilities.
The settlement resolves a whistleblower case brought by a former Banner Health employee who claimed one dozen hospitals in Arizona and Colorado overcharged Medicare for brief, inpatient procedures that should have been billed on a less costly outpatient basis, the U.S. Attorney’s Office in Arizona said.
The settlement resolves allegations that Arizona’s largest health provider “inflated in reports to Medicare the number of hours for which patients received outpatient observation care during this time period,” according to a statement from the federal prosecutors.
The settlement involved Medicare billing at one dozen hospitals from November 2007 through December 2016.
The case was brought by former Banner Health employee Cecilia Guardiola under the federal False Claims Act, which allows individuals to bring lawsuits on behalf of the government and collect a portion of any settlement. Under terms of the settlement, Guardiola will be paid $3.3 million.
Banner Health said in a statement that the settlement does not include any findings of wrongdoing and allows the system to avoid the costs and disruption of ongoing litigation.
“Banner Health is fully committed to adhering to all legal and regulatory requirements and providing patients with the highest quality of care,” the statement read. “Although the rules that dictate when a hospital can accommodate a physician’s request to admit a Medicare patient are complex and evolving, our policy has always been to make those decisions in accordance with government guidelines.”
Guardiola, a registered nurse and a law school graduate, was hired by Banner Health in October 2012 as a director overseeing clinical documentation. She resigned three months later after she determined her efforts to bring “ethical compliance” would be ineffective, according to a statement issued by Kreindler & Associates, a law firm representing Guardiola.
During her brief stint at Banner, Guardiola evaluated Banner’s clinical documentation as well as short-stay inpatient claims.
She discovered that Banner hospitals billed an “inordinate and improper number of short-stay claims, particularly those for expensive cardiac procedures,” according to the statement.
In all, she discovered more than 650 examples of Banner billing Medicare for an inpatient claim even though the patient was admitted and discharged the same day, the statement said.
She also discovered that two hospitals, Banner Boswell and Banner Del Webb, identified some cardiac procedures as urgent rather than elective to prevent claims from being denied, the statement said.