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.