07/03/13 — Hospital will pay $1.25M penalty

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Hospital will pay $1.25M penalty

By Phyllis Moore
Published in News on July 3, 2013 1:46 PM

Wayne Memorial Hospital is among 55 hospitals in 21 states that have agreed to pay $34 million to the U.S. government to settle allegations that they used more expensive inpatient procedures rather than outpatient spinal surgeries to get bigger payments from Medicare, the U.S. Justice Department said Tuesday.

The settlement centers around kyphoplasty procedures used to treat spinal fractures typically caused by osteoporosis. WMH's portion of the fines was $1.25 million.

Kyphoplasty involves a small incision on a patient's back, followed by the insertion of a filler material to increase the space between compressed vertebrae. Hospital officials said WMH began doing the pain-relieving surgery in 2003 and from then through December 2008, an estimated 495 cases were done at the hospital.

While denying the government's contentions, the hospital has agreed to resolve the matter so that it can continue to focus its resources on patient care, said William Paugh, WMH president.

"We have got to be pretty careful about what we say and the legal firm that we're working with helped us put together our response. I really can't stray too far outside of it," he said Tuesday afternoon. "We have tried to use our best judgment. A lot of these patients are old. They don't have caregivers at home.

"If the physician felt like we needed to admit the patient because of situations like that, there were no guidelines from the government when we first started doing these (procedures)."

In a press release issued Tuesday, Georgia Dees, director of public relations, wrote, "The hospital stands behind its physicians who made the billing status designations for these procedures. In 2000, kyphoplasty was a new procedure. In 2003 when the physicians began using this procedure at Wayne Memorial Hospital, there was little guidance from the Centers of Medicare and Medicaid Services as to the appropriate billing status of a patient receiving the procedure.

"Given the information available at the time, the hospital believes the physicians used their best medical judgment to determine whether to keep the patients overnight in the hospital or to discharge them the same day."

A similar settlement was reached last year, when 14 hospitals agreed to pay a settlement of more than $12 million. And in 2008, the Justice Department agreed to a $75 million settlement with Medtronic Inc.'s spine business. The government was investigating allegations that Kyphon, a company that had been acquired by Medtronic Spine in 2007, advised hospitals to do inpatient kyphoplasties to bulk up their Medicare payments.

To date, more than 100 hospitals have settled allegations related to the national investigation.

Paugh said the hospital was apprised of the situation in advance.

"We have been working on this," he said. "We were notified, you know, by the feds. They thought there was a problem with how we billed this. They looked at how many they thought were billed incorrectly, went back and looked at that.

"We have been working on this long enough that we realized there was probably going to be some kind of settlement that was going to be required."

While the nearly $1.3 million settlement was unforeseen back when the kyphoplasty procedures were introduced 10 years ago, the hospital had a little time to prepare for it, Paugh said.

"This kind of settlement, I mean it's a substantial settlement," he said. "It's something that certainly affects your bottom line and your ability to do the things that we need to do for the community."

In the latest settlement, WMH is among those making the largest payments. Others include Atrium Medical Center of Middletown, Ohio, which will pay $4.2 million; Mount Sinai Medical Center in Miami, $1.8 million; Altru Health System of Grand Forks, N.D., $1.5 million; Cedars Sinai Medical Center in Los Angeles, $1.5 million; Trover Health System of Madisonville, Ky., $1.2 million; The Queen's Medical Center in Honolulu, $1.1 million; and Des Peres Hospital in suburban St. Louis, $900,000.

Several multi-hospital organizations also agreed to settlements, including 23 hospitals with HCA Inc. of Nashville, Tenn., paying a total of $7.1 million; six hospitals with Lifepoint Hospitals Inc. of Brentwood, Tenn., $2.5 million; five hospitals with Trinity Health of Livonia, Mich., $3.9 million; four hospitals with Morton Plant Mease BayCare Health System of Clearwater, Fla., $2.4 million; hospitals with Baptist Memorial Hospital-Golden Triangle of North Columbus, Miss., $1.8 million; and two hospitals with Bayhealth Medical Center of Newark, Del., $1.1 million.

-The Associated Press contributed to this story.