Fifty-Five Hospitals Agree to Resolve False Claims Act Case for $34 Million

The Justice Department announced that 55 hospitals in 21 states have agreed to pay $34 million to settle allegations that they violated the False Claims Act. Fourteen of the hospitals are located in Florida: Mount Sinai Medical Center in Miami; Aventura Hospital & Medical Center in Aventura; Capital Regional Medical Center in Tallahassee; Doctors Hospital of Sarasota; Fawcett Memorial Hospital in Port Charlotte; Fort Walton Beach Medical Center; JFK Medical Center in Atlantis; North Florida Regional Medical Center in Gainesville; Southwest Florida Regional Medical Center in Fort Myers; St. Lucie Medical Center in Port St. Lucie; Morton Plant Hospital in Clearwater; Morton Plant North Bay Hospital in New Port Richey; Mease Dunedin Hospital; and Mease Countryside Hospital in Safety Harbor.

The settlement resolves allegations that the health care facilities submitted false claims to Medicare for kyphoplasty procedures. Kyphoplasty is a minimally-invasive procedure used to treat spinal compression factures typically caused by osteoporosis.

The allegations against all but 4 of the settling health care facilities were first made in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Craig Patrick and Charles Bates, former employees of Kyphon, Inc. The pair alleged that the facilities billed Medicare for kyphoplasty procedures on an inpatient basis, when in fact, most kyphoplasty procedures can safely be done as outpatient procedures. The whistleblowers claimed that the facilities did this to increase their Medicare billings and maximize profits.

The whistleblowers will receive approximately $5.5 million of the settlement proceeds as their reward under the qui tam provisions of the False Claims Act.