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Dignity Health agrees to $10 million settlement over False Claims allegations

par John R. Fischer, Senior Reporter | May 12, 2021
Business Affairs Insurance
Dignity Health, St. Joseph's Hospital and Neurosurgical Associates agreed to pay $10 million to settle false claims allegations that they defrauded Medicare
Dignity Health, St. Joseph’s Hospital and Neurosurgical Associates agreed to pay $10 million to settle accusations of defrauding Medicare and violating the False Claims Act.

St. Joseph’s Hospital, a practice owned by Dignity Health, one of the largest U.S. healthcare systems, and located in Phoenix, Arizona, and Neurosurgical Associates, a corporation located on St. Joseph Hospital’s campus, were accused of billing Medicare for doubly and triply concurrent and overlapping surgeries as separate procedures.

"Dignity Health St. Joseph's Hospital and Medical Center has reached an agreement with the Department of Justice to resolve a documentation and billing matter involving compliance and billing requirements set forth by the Centers for Medicare and Medicaid Services (CMS) for overlapping surgeries," Dignity Health said in an emailed statement to HCB News.

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A lawsuit was filed in June 2018 by Dr. Bruce Kingsley under the whistleblower provisions of the False Claims Act, which allows private citizens to bring civil actions on behalf of the U.S. government and share in any recovery obtained.

“We expect healthcare providers participating in Medicare to bill for their services accurately and honestly,” said Acting U.S. Attorney Glenn McCormick in a statement. “Proper billing ensures fair compensation and protects Medicare dollars that are much needed for patient care.”

Kingsley alleged in his suit that young and inexperienced residents would perform high-risk procedures “with little or no guidance” from an experienced surgeon and against patient expectations. An experienced “teaching” neurosurgeon would then claim responsibility for multiple surgeries occurring at the same time and make false claims to Medicare, he said, along with associated hospital admissions. Administrators allegedly falsified records to hide the deception, according to Modern Healthcare.

In accordance with the settlement, Neurosurgical Associates will enter into a five-year corporate integrity agreement (CIA) with the Department of Health and Human Services Office of Inspector General. Under this, it will maintain a compliance program, implement a risk assessment program and hire an Independent Review Organization to annually review its Medicare and Medicaid claims.

The settlement is not an admission of liability by Neurosurgical Associates or St. Joseph’s Hospital. It also is not a concession by the U.S. that the claims are not well founded.

The settlement was completed in December 2020.

Neurosurgical Associates referred HCB News to Dignity Health.

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