Business & Real Estate

Dignity Health pays $37 million to settle billing claims

Dignity Health has agreed to pay $37 million to settle allegations that 13 of its hospitals overcharged Medicare and a military health care program.

The case includes two Sacramento-area hospitals, Mercy General in Sacramento and Mercy San Juan Medical Center in Carmichael.

The U.S. Justice Department said Dignity, based in San Francisco, made the settlement on behalf of 13 hospitals in California, Nevada and Arizona. Formerly known as Catholic Healthcare West, Dignity operates a total of 39 hospitals.

The federal government filed a lawsuit in U.S. District Court in San Francisco saying the 13 hospitals overcharged Medicare and a military care care program known as Tricare from 2006 to 2010.

Under the settlement, a former Dignity employee named Kathleen Hawkins will receive $6.25 million under the federal whistleblower law.

Dignity said in a prepared statement: “The billing disputes reflect widespread confusion in the health care industry on unclear federal standards for approving coverage of patient admissions. As a result, it is often challenging for physicians to ensure their documentation adequately reflects their decision making in order to comply with complex regulations when making their best medical judgments.”

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.