Three HealthEast Care System hospitals have agreed to pay the United States $2.28 million to settle allegations that the health care facilities submitted false claims to Medicare, the U.S. Justice Department announced May 21, 2009.

According to the DOJ press release, the settlement resolves allegations that the St. Paul, Minn.-based hospitals overcharged Medicare from 2002 to 2007 by thousands of dollars each time they performed kyphoplasty, a minimally-invasive procedure used to treat certain spinal fractures that often are due to osteoporosis. The procedure can be performed safely as an outpatient surgery, but the government contends that the HealthEast hospitals performed the procedure on an inpatient basis in order to increase their Medicare billings.

The settlement with HealthEast follows the government’s May 2008 settlement with Medtronic Spine LLC, corporate successor to Kyphon Inc. Medtronic Spine paid $75 million to settle allegations that the company defrauded Medicare by counseling hospital providers to perform kyphoplasty procedures as an inpatient procedure.

The qui tam or whistleblower lawsuit against the HealthEast hospitals was brought under the False Claims Act.

To read the full press release, go to: http://www.usdoj.gov/opa/pr/2009/May/09-civ-497.html.

For more information about qui tam law and health care fraud, contact Nolan and Auerbach, PA.