CHW, Sutter pay $2.3 million to settle Medicare double-billing case

12/08/2011 12:00 AM

12/07/2011 11:36 PM

Two of Sacramento's biggest health care players paid a combined $2.3 million to the federal government to settle allegations that 61 of their hospitals double-billed Medicare for therapies and services, U.S. Department of Justice officials announced Wednesday.

Catholic Healthcare West paid more than $875,000 and Sutter Health nearly twice that – more than $1.43 million – for alleged duplicate charges for infusion therapies and treatments to break up kidney and bladder stones, in what Lauren Horwood, a spokeswoman in the Sacramento U.S. attorney's office, called "a significant settlement."

"This office will actively pursue recovery of Medicare dollars," U.S. Attorney Benjamin Wagner said in a statement Wednesday announcing the pact.

The settlement stemmed from a year-long investigation by the Department of Health and Human Services that began with department auditors, Horwood said.

The probe centered on CHW activities from January 2002 to March 2008 and Sutter Health activities from September 2003 to December 2007.

"This settlement not only recoups overpayments made by Medicare, it helps ensure more accurate billing practices by these hospital systems in the future," Wagner said.

Officials at the two health networks admitted no wrongdoing in agreeing to the settlement, Horwood said. No charges will be filed. In a statement, CHW officials said the government in 2009 notified the health network of the overpayments. CHW auditors identified the charges – $875,564 in all – and returned the money to Medicare.

"CHW is committed to ethical business practices and is pleased to have resolved this matter," the statement read.

Sutter officials were not available for comment Wednesday.

The list of Sacramento-area facilities accused of overcharging include Mercy General Hospital, Mercy San Juan and Mercy's Methodist hospitals; Sutter General Hospital and Sutter campuses in Auburn, Davis, Grass Valley, Jackson and Roseville.

It's not the first time Sacramento-based Sutter has been accused of double-billing.

In April, state Insurance Commissioner Dave Jones joined a 2009 lawsuit alleging that Sutter Health routinely charged insurers for anesthesia services that were never performed and double-billed for services that were.

Jones, at the time, estimated that the charges were "in the hundreds of millions of dollars," in the suit filed in Sacramento Superior Court. That case is making its way through the courts, said Department of Insurance spokesman Ioannis Kazanis.

Sutter Health officials at the time denied the allegations, saying that the health network "is committed to compliant billing and charging practices."

Many of the Sutter hospitals named in the Department of Justice settlement announced Wednesday, including Sutter General and Sutter campuses in Auburn and Davis, were also named in the insurance commissioner's suit.

In 2006, Sutter Health agreed to grant discounts and refunds to uninsured patients the network was accused of overcharging, stemming from a 2004 class-action lawsuit.

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