A California hospital will pay a $10.25M fine to settle allegations that it breached False Claims Act regulations.
The medical facility in the firing line is Oroville Hospital, which is based in Orrville, California. After a prominent whistleblower case, the hospital agreed to pay $10,250,000 to the United States and the State of California to resolve allegations that it knowingly submitted false claims to Medicare and Medicaid.
California hospital to pay $10.25M to settle allegations
Their overstepping of federal regulations included a kickback and physician self-referral scheme, unnecessary patient referrals for unneeded medical care, and unfit-for-purpose diagnosis codes.
According to documents submitted in the case, the hospital billed “Medicare and Medicaid for more expensive inpatient hospital stays when inpatient care was not medically necessary and observation status or outpatient care was appropriate. The United States also alleged that Oroville Hospital illegally incentivized inpatient admissions by paying financial bonuses to doctors who worked full time at the hospital and were in a position to influence whether or not patients were admitted to the hospital.”
These bonuses were found to be related to the volume of patient intakes and referrals made to physicians working at the Oroville Hospital. In connection with these referrals, the facility also made false claims to Medicare and Medicaid that involved “false diagnosis codes for systemic inflammatory response syndrome (SIRS), resulting in excessive reimbursement to the Hospital.”
The Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of California achieved the financial resolution. Oroville Hospital will pay $9,518,954 to the federal government and $731,046 to the State of California.
The Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Counsel to the Inspector General and Office of Investigations, and the California Department of Justice, Division of Medi-Cal Fraud and Elder Abuse, helped with their efforts.
“Physicians should make decisions based on the best interests of their patients, not their own personal financial interests,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California.
“Hospitals engaging in kickback schemes betray the trust placed in them by their communities and distort care decisions that should be untainted by illegal kickbacks. This settlement demonstrates my office’s commitment to preserving the integrity of public healthcare programs and ensuring that the well-being of patients remains paramount.”
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