DOJ Settles With Seven More Hospitals To Resolve Medicare Claims For Kyphoplasty

Posted on January 4, 2011 by Antonia F. Giuliana

The DOJ announced today that it has reached $6.3 million in settlements with seven more hospitals to resolve allegations that the hospitals overcharged Medicare for kyphoplasty procedures. A kyphoplasty is a surgical procedure to treat spinal compression fractures associated with osteoporosis and cancer. As we reported earlier, in 2008, the DOJ settled a qui tam False Claims Act case brought against Kyphon Inc., the manufacturer of a device used in kyphoplasties, for $75 million. The relators in the action, former Kyphon employees, alleged that Kyphon encouraged hospitals to administer kyphoplasties on an inpatient basis, rather than a less costly but clinically appropriate outpatient basis, to maximize the reimbursement they could receive from Medicaid and Medicare.

Following the settlement of the action against Kyphon and allegations made in a qui tam lawsuit filed in the Western District of New York in 2008, the U.S. Attorney’s office in Buffalo began to investigate individual hospitals that administered kyphoplasties. (For more on the suit against Kyphon and the government’s investigation into hospitals, click here: http://www.justice.gov/opa/pr/2008/May/08-civ-455.html, and here: http://fcaexpert.blogspot.com/2009/02/new-national-kyphonplasty-enforcement.html.)

The settlements announced today follow the settlements the DOJ reached with eighteen other hospitals in 2009 and 2010 for kyphoplasty-related Medicare claims. With the settlements announced today, the government has recovered more than $15.7 million from hospitals for kyphoplasty-related Medicare claims.

For more information about the DOJ’s enforcement activities concerning kyphoplasty claims and the American Hospital Association’s response to the DOJ’s kyphoplasty initiative, see our prior posts here.
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Update: AHA's Continued Efforts To Persuade The DOJ To Reconsider The Hospital Kyphoplasty Initiative

Posted on December 10, 2010 by Antonia F. Giuliana

Several months ago, we reported that the American Hospital Association (“AHA”) sent a letter to U.S. Attorney General Eric Holder and Kathleen Sebelius, Secretary of Health and Human Services, requesting a review of the so-called kyphoplasty initiative being pursued by the Office of the United States Attorney for the Western District of New York. Earlier this week, AHA wrote a letter to Associate Deputy Attorney General Edward Siskel and Deputy Assistant Attorney General Michael Hertz thanking them for meeting with AHA on November 22, 2010 to discuss AHA’s request for greater oversight of the kyphoplasty initiative.

 

According to the letter, at the meeting, AHA proposed that several updates be made to the DOJ’s 1998 guidance document titled “Guidance on the Use of False Claims Act in Civil Health Care Matters.” AHA’s proposals include, but are not limited to, the following :

  • DOJ coordination requirements should apply not only to designated “National Initiatives,” but for any investigation that involves claims submitted by more than one provider and originates from (1) allegations raised by a whistleblower; (2) referral from a CMS contractor; or (3) “data mining” by any DOJ or HHS component or contractor.
     
  • Any requests for information and records should take into account the cost and burden of ediscovery and be based on an individualized assessment of provider circumstances. Relevant factors include: (1) the extent to which provider databases and accounting records are searchable and easily accessible; (2) the scope, cost and burden attendant to litigation hold notices, including data storage and retrieval costs; and (3) the impact of delayed review of provider submissions and delayed resolution on provider accounting and debt ratios.

AHA stated that it believes steps like those outlined above can restore confidence in the working relationship between hospitals and the DOJ by offering providers a clear assurance that such oversight authority will be exercised properly and judiciously. AHA requested that the DOJ prepare a response to its proposals and meet with AHA during the week of January 24, 2011. We will continue monitoring these discussions and will post any further developments.
 
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