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Huge Recovery Against Beth Israel Medical Center for Medicare False Claims Act Violations

above-the-bar-logo.jpgBeth Israel Medical Center (“Beth Israel”) recently settled allegations of violating the False Claims Act by agreeing to pay the government $13 million for damages and penalties. The hospital was charged with fraudulently inflating its fees to get “outlier payments” for Medicare patients by manipulating the federal government into paying millions of dollars more than the treatment’s actual cost.

Preet Bharara, the U.S. Attorney for the Southern District of New York, announced that the government filed and simultaneously settled the False Claims Act violations with Beth Israel. If you know of Medicare or Medicaid fraud being committed against the government, call our attorneys now to determine if you have a qui tam whistleblower case under the False Claims Act. Depending on whether the government takes over your case, you could recover anywhere between 15% to 30% of the government’s recovery.

The government’s complaint charged Beth Israel, which is part of Continuum Health Partners (“Continuum”), with turbocharging, which is when a hospital or medical provider fraudulently increases its billed charges for providing care, which are much higher than the actual cost of providing such care. Beth Israel began this practice in the late 1990s to take advantage of Medicare’s outlier payments which are reimbursement for patients whose care costs much more than the norm. As the threshold to qualify for this outlier payment rose from $9,700 in 1997 to $33,560 per inpatient discharge in 2003, Beth Israel also increased its prices of services that affect elderly patients although the actual cost for treating these patients was “barely rising.” In fact, the government’s complaint reveals that between 1996 and 2003, Beth Israel’s Medicare inpatient costs increased by only $17.4 million while its Medicare inpatient charges increased by more than $285 million.

Beth Israel engaged in this practice from 1998 through August of 2003. However, partly due to the statute of limitations, the settlement only covers the period from February 21, 2002 through August 7, 2003, which is when the federal rules changed and turbocharging stopped.

The government’s complaint clearly shows that the hospital executives knew what they were doing and that it was deliberate. The complaint also reveals how Beth Israel hired a strategic consultant, the National Revenue Group, to recommend how it could increase its outlier payments to make more money. For example, Continuum’s vice president for patient financial services wrote in an e-mail that the hospital was going to try to “keep the charges high even at the lowest levels of service in the E.R.” The vice president for patient accounting responded “This is a good start. . . . Go for the gusto!”

Beth Israel’s deliberate and deceitful billing practice to make more money from the government is outrageous. It is unfortunate that the statute of limitations stopped the government from obtaining a full recovery. Perhaps if a hospital employee or physician who knew about the hospital’s fraud against the government had reported the illegal billing practice and brought a whistleblower lawsuit, it could have been stopped sooner. Given the complexity and enormity of healthcare in this country, it is impossible for the government to detect every instance of healthcare fraud.

If you have observed fraud being committed against the government at your workplace, call our Whistleblower Attorneys at Villanueva & Sanchala at (800) 893-9645 to discuss if you have claim under the False Claims Act. Your actions could lead you to a huge recovery as well as save taxpayers millions of dollars.


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