Millcreek Community Hospital has agreed to pay nearly $2.5 million to resolve claims that it violated the federal False Claims Act by billing Medicare and Medicaid for medically unnecessary inpatient rehabilitation services, the U.S. Attorney’s Office in Pittsburgh said.
The settlement did not grow out of a lawsuit but was the result of an investigation and negotiations between the federal government and Millcreek Community Hospital, which is part of LECOM Health, according to information in a statement that the U.S. Attorney’s Office released on Monday.
U.S. Attorney Scott W. Brady said the government contended that Millcreek Community Hospital admitted patients to the hospital’s inpatient rehabilitation unit who did not qualify for such services from July 1, 2013, to December 31, 2017, according to the statement.
Brady also said the government contended that the hospital during that time failed to adequately document that the inpatient rehabilitation services were medically necessary and reasonable.
The total cost of the settlement is $2,451,000, the U.S. Attorney’s Office said. As part of the settlement, Millcreek Community Hospital also entered into an agreement that will require the federal Department of Health and Human Services to monitor the hospital’s billings for a period of five years. The department’s Office of Inspector General will handle the monitoring.
“Health care fraud threatens the safety and integrity of our entire health care system,” Brady said in a statement. “When doctors and medical professionals order unnecessary testing or services, they in effect steal from the most vulnerable members of our community by raising the cost of care for everyone.”
The claims resolved by the settlement are allegations, the U.S. Attorney’s Office. It said the investigation involved no determination of liability.
Brady was out of the office on Monday and unavailable for comment, said a spokeswoman for the U.S. Attorney’s Office in Pittsburgh, which includes Erie. A spokesman for LECOM could not be immediately reached for comment on Monday evening.
If a federal lawsuit had been filed against Millcreek Community Hospital, the outcome could have been costly. The False Claims Act allows the federal government or private citizens to file civil lawsuits on behalf of the United States alleging that private companies have submitted fraudulent claims for government payments.
The False Claims Act imposes a civil penalty of thousands of dollars for each false claim and triples the amount of the government’s damages if a lawsuit is successful or ends in a settlement. And if a citizen sues and the suit is successful or ends in a settlement, the citizen gets a percentage of the proceeds and the government gets the rest.
The Department of Health and Human Services’ Office of Inspector General investigated the case against Millcreek Community Hospital, and Assistant U.S. Attorney Rachael L. Mamula handled the settlement, the government said.