Rex Healthcare is paying $1.9 million to settle allegations that the Raleigh, North Carolina-based hospital routinely submitted false Medicare claims.
The settlement figure, plus interest, was announced Monday by the U.S. Department of Justice. The government alleged that the hospital submitted claims to Medicare for a variety of minimally invasive procedures in the 2004 through 2007 time frame. The government claims these procedures were classified as inpatient admissions in order to increase the hospital’s Medicare reimbursement even if there was no medical need justifying the more expensive inpatient admissions.
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The claims come from a lawsuit brought under the whistle-blower provisions of the federal False Claims Act. The law permits citizens with knowledge of fraud against the government to bring a court action on behalf of the United States. Citizens can also share in any recovery resulting from the suit.
The 2008 suit was filed in Buffalo, New York by Craig Patrick and Charles Bates, former employees of Medtronic (NYSE:MDT) subsidiary Kyphon. They will receive $80,000 for claims related to kyphoplasty, a type of minimally invasive surgery for treating compression fractures in the spine.
The Justice Department says that since January 2009, it has recovered more than $6.8 billion in False Claims Act cases.
