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NEW: RI Hospital To Pay $5.3 Million for Fraudulent Hospital Stays

Monday, February 13, 2012


Rhode Island Hospital will reimburse federal health care programs approximately $2.6 million dollars and will pay the federal government approximately $2.7 million in double and triple damages for ordering medically unnecessary overnight patient hospital stays and then submitting claims for payment to federally funded Medicare and Medicaid programs.

An investigation by the United States Attorney’s Office for the District of Rhode Island; Office of Inspector General of the U.S Department of Health and Human Services (OIG-HHS); and the Federal Bureau of Investigation determined that during the period from January 1, 2004, through December 31, 2009, medically unnecessary overnight hospital admissions were ordered for approximately 260 patients who underwent stereotactic radiosurgery, otherwise known as Gamma Knife treatment. The investigation also revealed that Rhode Island Hospital’s claims for reimbursement for the overnight admissions to Medicare and Medicaid falsely represented that the admissions were medically necessary when, in fact, they were not.

This afternoon, Rhode Island Hospital issued the following statement:

"Rhode Island Hospital has reached a settlement with the United States Department of Justice (DOJ) regarding compliance with reimbursement rules set by Medicare for gamma knife treatment. Gamma knife, a form of stereotactic radiosurgery, is usually used to slow the growth of small deep brain tumors that are difficult to remove surgically. Rhode Island Hospital has one of only three gamma knife centers in New England.  All the gamma knife procedures were medically necessary; however, the DOJ contends that the hospital classified gamma knife as an inpatient procedure when it should have been classified as an outpatient procedure.  The hospital has complied fully with the DOJ investigation, but admits no wrongdoing, and by settling avoids incurring the additional and significant costs associated with litigation.

For more than 10 years, Medicaid and other private payors routinely preauthorized gamma knife as an inpatient procedure. Rhode Island Hospital applied this same level of care to Medicare patients, believing it represented the standard practice of care.

We have put additional systems in place to analyze and assess our gamma knife practices to ensure procedures are classified correctly.  We will also provide additional training to employees of the Gamma Knife Center and other employees to ensure that we remain compliant in this complex regulatory environment."

According to a Civil Settlement Agreement, OIG-HHS reserves all rights to institute, direct, or to maintain any administrative action seeking exclusion against Rhode Island Hospital and/or its officers, directors, and employees from Medicare, Medicaid, and all other federal health care programs. In addition, the Agreement stipulates that the federal government does not release Rhode Island Hospital from any criminal liability or liability to the Internal Revenue Service in this matter.

“Health care organizations accused of billing for medically unnecessary services by abusing Medicare and Medicaid rules to put the profit motive before quality health care services will be identified and held responsible," said Susan J. Waddell, Special Agent in Charge of the region covering Rhode Island for the Office of Inspector General of the Department of Health and Human Services.  "This settlement reflects the determination of OIG and the Department of Justice to protect taxpayer funded health care services for those in need.”

The investigation for the United States Attorney’s Office was led by Assistant U.S. Attorney Dulce Donovan. The matter was also investigated by the Office of Inspector General of the U.S Department of Health and Human Services and the Federal Bureau of Investigation


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