Officials at three HealthEast Care System hospitals in the Twin Cities have agreed to pay the federal government $2.28 million to settle allegations that they overcharged Medicare during a five-year period.
The settlement, announced Thursday by the Justice Department, covers overcharges from 2002 until 2007 at three hospitals: St. Joseph's, St. John's and Woodwinds.
According to the Justice Department, the overcharges, thousands of dollars each, involved kyphoplasty, a minimally invasive procedure used to treat spinal fractures that often are due to osteoporosis.
The procedure can be performed safely on an outpatient basis, but the government said the hospitals performed the procedure on an inpatient basis to increase their Medicare billings.
The hospitals previously paid $1.45 million after determining through a self-audit that they had overbilled Medicare for kyphoplasty claims. This amount has been credited against the total settlement of $2.28 million.
In a statement, HealthEast officials said that after they became aware of the government's concerns in June 2007, the company took immediate action to investigate its practices.
The allegations involve Kyphon Inc., which Fridley-based Medtronic Inc. bought in 2007 for $4.2 billion. Last year, Medtronic paid $75 million to settle allegations against Kyphon.
The whistle-blower lawsuit was filed last year by Craig Patrick of Hudson, Wis., a former reimbursement manager for Kyphon, and Charles Bates, formerly a regional sales manager for Kyphon in Birmingham, Ala.
Bob von Sternberg • 612-673-7184
