Dignity Health, a hospital chain based in San Francisco, Calif., has agreed to pay the government $37 million to settle allegations of overbilling Medicare and the military health program from 2000 to 2010.
The probe began when former Dignity Health employee Kathleen Hawkins revealed the irregularities in the billing system of the hospital chain. She will be receiving $6.25 million from the settlement.
The auditors found evidences of bills for inpatient care obtained from 13 hospitals in California, Nevada, and Arizona with charges that were way too high compared to outpatient cares, the Associated Press reported.
The charges were for elective cardiovascular surgeries for stents and pacemakers and diagnostics procedures. The Justice Department also found overbilling for spinal operations called kyphoplasty at four hospitals from 2000 to 2008, according to SFGate.
"Hospitals that attempt to boost profits by admitting patients for expensive and unnecessary inpatient hospital stays will be held accountable," Ivan Negroni, chief of the U.S. Health and Human Services Department's inspector general's office in San Francisco, said in a statement.
Meanwhile, Dignity Health explained that the settlement does not mean that it is guilty of the allegations. The decision to settle was made as it would cost the company more to go into trial.
"The billing disputes reflect widespread confusion in the health care industry on unclear federal standards for approving coverage of patient admissions," the company said. "As a result, it is often challenging for physicians to ensure their documentation adequately reflects their decision-making."
Overbilling and similar allegations are nothing new. Early this year, an auditing company found that Medicare has been overpaying almost $5 billion for short stays in hospitals. In another report, a study performed by Harvard researchers found that the government also paid $1.9 billion for unnecessary tests and procedures in 2009 alone.
