Banner Health settles whistleblower case for $18 million

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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.

Johns Hopkins favored out-of-state patients over locals to increase revenue, lawsuit claims

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A former supervisor in the patient appointments department at the Johns Hopkins Health System Corp. has accused the medical system in a lawsuit of prioritizing out-of-state patients over Maryland residents to boost revenue.

Anthony C. Campos said in the lawsuit filed Wednesday in U.S. District Court that his department was directed with the task of “filling the plane” with patients from outside Maryland. The directive to bring in more of these patients came from the highest ranks at the medical system, the lawsuit contends.

In Maryland, hospitals are required under an agreement with the federal government to operate under global budgets assigned to them by the state that limit how much revenue they can make in a given year. The budgets were put in place as part of a broader effort to cut soaring health costs and improve care.

But the budgets only apply to patients who live in Maryland. Any money brought in by treating out-of-state patients is additional revenue for the hospital.

The lawsuit contends that Hopkins is violating a clause in its budget agreement with the state that says hospitals can’t deny services to patients for inappropriate financial reasons. The medical system is also required to provide care that focuses on the community, something the lawsuit contends can’t be done if the emphasis is on patients from elsewhere. The medical system also hid what it was doing from the Centers for Medicare and Medicaid, which oversees payments through public health programsand the Health Services Cost Review Commission, which sets the hospital’s global budgets, according to the lawsuit.

An attorney representing Campos said he was not available for comment.

“I think Maryland residents will find it highly offensive that Hopkins is pushing out-of-state residents to the front of the treatment line while Maryland residents are forced to the back of the line all in the interest of profits,” said the attorney, Lindsey Ann Thomas, with the law firm of Conti Fenn & Lawrence LLC.

In a statement Wednesday night, Johns Hopkins said the “the complaint is without merit. Safe and high quality care for all patients, regardless of where they live, is our number one priority. Our census shows that the majority of our patients are from Maryland and that the number has steadily increased over the past several years.” ​

The medical institution began pushing for more out-of-state patients in 2015, Campos said in the lawsuit. He pushed back and told his bosses his team was getting complaints and concerns from doctors about the preference being given to out-of-state patients. Campos’ supervisors responded that they were following the orders of senior management, according to the lawsuit.

Priority was sometimes given without taking into consideration which patients were sicker, the lawsuit said.

The tactics to attract these patients became more aggressive over time, the lawsuit said. Johns Hopkins USA, a medical concierge service, was enlisted to help prioritize out-of-state appointments. The medical system began targeting the most profitable departments, including neurosurgery, oncology, otolaryngology, pediatrics and surgery. In some departments, a supervisor was ordered to intervene if an out-of-state patient could not get an appointment within 30 days, and those patients were also given priority on wait lists, the lawsuit said.

In May 2016, the Department of Patient Access was told that 250 to 350 additional out-of-state cases were needed that fiscal year to reach profit targets of $5 million to $7 million, according to the suit.

Campos is asking that the government be awarded damages and Johns Hopkins fined under the False Claims Act. He is also asking for a “percentage of any recovery allowed to him.”

69 Indiana hospitals accused of retaining $324M in fraudulent EHR incentive payments

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A recently unsealed lawsuit filed by attorneys under the qui tam, or whistle-blower, provision of the False Claims Act accuses Indiana hospitals of overcharging patients for their electronic medical records.

Here are eight things to know about the lawsuit.

1. After experiencing difficulty obtaining medical records from four Indiana hospitals in their work on personal injury and medical malpractice cases, attorneys from Anderson, Agostino & Keller sued the hospitals in September 2016. They alleged the hospitals falsely certified they were meaningful users of EHR technology.

2. Under meaningful use stage 1, hospitals could show compliance and receive incentive payments by filing attestation documents reporting compliance with core criteria requirements. The lawsuit against the Indiana hospitals focuses on core measure No. 11, which aimed to provide patients with electronic medical records within three business days of receiving a request from the patient or their agent.

3. To receive the incentive payments, hospitals had to show the number of medical record requests they received annually and if the records were supplied to those requesting them within three business days. Hospitals that failed to meet at least 50 percent of their requests within the time frame would not be eligible to receive incentive payments.

4. Based on their experience requesting records from the hospitals and after examining public disclosures, the lawyers alleged the hospital defendants falsely certified compliance with core measure No. 11.

5. The lawyers also claim the hospitals allowed CIOX Health, a company that provided medical records for the hospitals, to illegally profit from the release of the electronic medical records.

“CIOX routinely and repeatedly engaged in a practice, policy, and/or scheme to illegally and fraudulently over-bill patients for the provision of medical records,” the complaint states.

6. The lawyers added organizations operating an additional 65 hospitals to the lawsuit after examining disclosures and identifying a statistical trend that they argue indicates the same type of fraudulent reporting of core measure No. 11.

7. “In sum, these hospitals have been paid $324,386,169.32 in public funding from the citizens of the United States in return for the promise that patients would be provided with fast, cheap, easy access to their electronic health records, and these hospitals have failed to keep that promise,” the complaint states.

“A failure to properly track and report core measure 11 means that the defendant hospitals did not achieve ‘meaningful use’ as defined by the legislation and its ensuing rules. This means that they were not eligible to receive any funding under this program, and have sought and received the grant funding at issue in a fraudulent manner that constitute false claims for public funding.”

8. The Department of Justice declined to intervene in the lawsuit.

Lawsuit: Epic’s software double-bills Medicare, Medicaid for anesthesia services

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Health IT giant Verona, Wis.-based Epic Systems has been hit with a False Claims Act lawsuit that alleges the company’s software double-bills Medicare and Medicaid for anesthesia services, resulting in the government being overbilled by hundreds of millions of dollars.

The lawsuit, which was filed under the qui tam provision of the False Claims Act in 2015 and made public Thursday, alleges Epic’s billing software’s default protocol is to charge for both the applicable base units for anesthesia provided on a procedure and the actual time taken for the procedure. This results in the provider being reimbursed twice for the base unit component, according to the lawsuit.

The whistle-blower who filed the lawsuit, Geraldine Petrowski, worked at Raleigh, N.C.-based WakeMed Health from September 2008 through June 2014. In her role as supervisor of physician’s coding, Ms. Petrowski served as the hospital liaison for Epic’s implementation of its software at WakeMed Health.

Ms. Petrowski claims she provided examples to Epic representatives illustrating the double-billing practice, and the company initially ignored her complaints. “It was only after relator, Petrowski, reiterated her direction to fix this software setting that [Epic] relented and fixed it only for the WakeMed Health facility,” according to the lawsuit.

The lawsuit alleges the unlawful billing protocol has resulted “in the presentation of hundreds of millions of dollars in fraudulent bills for anesthesia services being submitted to Medicare and Medicaid as false claims.”

In a statement to Healthcare IT News, an Epic spokeswoman said, “The plaintiff’s assertions represent a fundamental misunderstanding of how claims software works.”

The Department of Justice declined to intervene in the case, and the whistle-blower will move forward in the case without the government.

Arbitrator awards fired Swedish Health whistleblower surgeon $17.5M

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A substantial payout for a fired whistleblower has Swedish Health crying foul. The organization will now challenge the arbitrator’s award in court.

David Newell, M.D., blew the whistle on a high-profile case involving neurosurgeons who double-booked patients for surgeries at a Swedish Health hospital in Seattle. The fallout from that case was sufficiently brutal for the CEO of Providence St. Joseph, which acquired Swedish, to take out a full-page ad in The Seattle Times apologizing to the organization’s employees and patients.

Now, The Seattle Times reports, an arbitrator has agreed with Newell’s claim that Swedish fired him in retaliation for his whistleblowing activities, and awarded him $17.5 million. The award reportedly includes $15.5 million in lost earnings and another $1 million for emotional distress.

Swedish Health contends it fired Newell after he failed to immediately disclose he had been arrested in a prostitution sting, as required by his employment agreement. The organization also protested the amount of lost earnings requested, noting that the figure represented nearly 10 times his annual compensation in 2014, and that he would have needed to perform more than 3,000 complex brain-aneurysm procedures in a year to reach such an amount.

Guy Hudson, M.D., the CEO of Swedish, blasted the ruling in a statement (PDF). “For this arbitrator to award Dr. Newell $17.5 million—at a time when many people cannot afford healthcare or fear losing their insurance, and when there is an epidemic of sex trafficking and exploitation of women—is unconscionable and outrageous,” he said.

But the newspaper reports that in a recent court filing, Newell’s attorney maintained that evidence presented showed Swedish Health’s actions “were part of a pattern of targeting and interfering with established neurosurgeons’ practices, retaliatory behavior, and a disregard for patient safety.”

In a similar case, a court recently ruled in favor of a Boston-based surgeon who lost his job at an upstate New York hospital after speaking out about concurrent surgeries performed there by another doctor. Lost wages in that case totaled $88,277.

Operators of nearly 300 cancer treatment centers accused of illegally dividing up Florida market

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A 50-page federal whistle-blower complaint accuses Florida Cancer Specialists & Research Institute and 21st Century Oncology of illegally dividing services in southwest Florida to maintain their individual oncology care monopolies, according to the News-Press.

The lawsuit, which was filed under seal last year and recently made public, alleges the two Fort Myers, Fla.-based cancer care companies had an illegal “gentleman’s agreement” under which they provided exclusive patient referrals to each other.

The lawsuit further alleges Florida Cancer Specialists allowed unqualified medical assistants to service patients’ surgically implanted catheters.

The federal government declined to intervene in the case; therefore, the whistle-blowers will continue in the litigation.

The lawsuit was filed by Sharon Dill, who served as Florida Cancer Specialists’ vice president for human resources and chief human resources officer between 2012 and 2015, and Christina Sievert, Florida Cancer Specialists’ vice president of clinical financial services between 2013 and 2015.

Ms. Dill alleges she was fired after disclosing an unspecified disability. Ms. Sievert alleges Florida Cancer Specialists retaliated against her for waging a gender discrimination claim, according to the report.

Florida Cancer Specialists said it takes the allegations in the complaint seriously and is looking into the matter. 21st Century Oncology, which filed for Chapter 11 bankruptcy in May, told the News-Press it does not comment on pending litigation.

21st Century Oncology operates 179 cancer treatment centers across the U.S. and Latin America, and Florida Cancer Specialists has nearly 100 treatment locations.

Healthcare companies overbilling Medicare targeted by nonprofit whistleblowers group

The outreach was prompted by a Justice Department announcement in June that Genesis Healthcare would pay the federal government more than $53.6M.

The nonprofit Corporate Whistleblower Center is urging a medical doctor in any state to call them if they possess proof a healthcare company is substantially overbilling Medicare for hospice services for people who are not dying. The organization is also interested in hearing about skilled nursing or nursing homes facilities that are billing Medicare as if they are fully staffed when in fact they’re not.

The outreach was prompted by a Justice Department announcement in June that Genesis Healthcare would pay the federal government more than $53.6 million to settle lawsuits and investigations alleging that companies it acquired violated the False Claims Act — submitting false claims to government healthcare programs for medically unnecessary therapy and hospice services, and grossly substandard nursing care.

Allegedly the companies were also billing for hospice services for patients who weren’t terminally ill and were thus ineligible for the Medicare hospice benefit. The companies also allegedly billed inappropriately for certain physician evaluation management services.

Additionally, the settlement resolves allegations that Genesis and its affiliates violated certain essential requirements that nursing homes have to meet to participate in and receive reimbursements from government healthcare programs, and failed to provide sufficient nurse staffing to meet residents’ needs. The whistleblowers will receive a combined $9.67 million as their share of the recovery in this case.

The Corporate Whistleblower Center suspects that similar scenarios have the potential to occur in every state, whether it be a hospital admitting Medicare patients who should not have been admitted, a nursing home billing Medicare as if their Medicare patients are receiving the proper care when they’re not, or a hospice company signing up patients who are not dying.

The group advised potential whistleblowers not to approach the government first, or the news media. It offers help finding law firms to handle the information.

Potential whistleblowers can contact the Corporate Whistleblower Center at 866-714-6466 or at