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$34M Medicare Fraud Settlement is Reached with 55 Hospitals, Including Facilities in Boston and Fall River

The US Department of Justice and 55 hospitals have reached a $34M Medicare fraud settlement accusing 55 hospitals in 21 states of engaging in making false claims for kyphoplasty procedures. The allegations were brought under the False Claims Act by whistleblowers, who will receive about $5.5 million from the settlements reached. Two of the hospitals involved are located in Massachusetts. They are the New England Baptist Hospital in Boston and St. Anne’s Hospital in Fall River.

Kyphoplasty is a procedure for treating spinal fractures frequently caused by osteoporosis. It involves using a balloon device to work with the compressed vertebra and then injecting bone cement into the cavity after the balloon is taken out. The treatment usually requires just a few hours of recovery and is generally an outpatient procedure.
According to the government, the hospitals regularly billed Medicare for this minimally invasive procedure on a more expensive, inpatient basis.

The whistleblowers, Charles Bates and Craig Patrick, contend that it was their ex-employer Kyphon that convinced the hospitals to submit the false claims not just to Medicare but also to other government healthcare programs by demonstrating that revenues would be larger if kyphoplasty was billed as an inpatient procedure. Kyphon is the company that sold the hospitals the materials and equipment needed to perform kyphoplasty. (Patrick was previously a Kyphon reimbursement manager and Bates served as a regional sales manager.)

This is not the first settlement that the government has reached to resolve Medicare fraud claims involving kyphoplasty. In 2008, the DOJ settled with Medtronic Spine for $75 million over the allegations. Medtronic Spine is Kyphon’s corporate successor.

Qui Tam Lawsuit
If you are considering becoming a whistleblower to expose fraud committed against the US government, you should speak with an experienced Boston Qui Tam law firm to explore your legal options. Filing a whistleblower/Qui Tam lawsuit may not only expose/stop the fraud but also entitle you to a percentage of what is recovered.

Fifty-Five Hospitals to Pay U.S. More Than $34 Million to Resolve False Claims Act Allegations Related to Kyphoplasty, Justice.gov, July 2, 2013

Medtronic Spine, Formerly Kyphon Inc., to Pay U.S. $75 Million to Resolve Allegations of Defrauding Medicare, Justice.gov, May 22, 2008

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