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Alabama Hospitals Settle False Claims Allegations; Birmingham Whistleblower Shares $1.1M Reward

January 5, 2011

Two hospitals in north Alabama — among five others in Florida, Mississippi, Texas, South Carolina, and North Carolina — will collectively pay $6.3 million to settle allegations that they submitted false claims to Medicare. Between 2000 and 2008, Decatur General Hospital and Florence-based Coffee Health Group (formerly Eliza Coffee Memorial Hospital) allegedly overcharged Medicare by performing kyphoplasty as an in-patient procedure rather than as a less costly out-patient procedere.  Kyphoplasty is “a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis,” which in most cases can and should be performed on an out-patient basis, says DoJ.

Kyphoplasty Animation

Other hospitals that contributed to the overall settlement were: Lakeland Regional Medical Center, Lakeland, Fla.; St. Dominic-Jackson Memorial Hospital, Jackson, Miss; Seton Medical Center, Austin, Texas; Greenville Memorial Hospital, Greenville, S.C.; and Presbyterian Orthopaedic Hospital, Charlotte, N.C. Over the past two years 18 additional facilities have settled whistleblower allegations of similar kyphoplasty false claims to Medicare, and the medical device company that alegedly assisted the hospitals in making the false claims paid $75 million to avoid facing healthcare fraud allegations.  The Decatur Daily and Florence’s Times Daily ran stories quoting officers from the two Alabama hospitals regarding the settlement.

The cases were filed by a former Birmingham, Alabama-based regional sales manager for device-manufacturer Kyphon, Charles Bates, and his former colleague Patrick Hudson, who filed suit on behalf of the United States under the qui tam provisions of the federal False Claims Act. Together, the whistlebowers will share in a reward of $1.1 million.

To report healthcare fraud or learn more about qui tam actions and the False Claims Act, contact Frohsin & Barger.

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