Consumer Fraud

Georgia hospital pays $20 million to settle Medicare fraud allegations

Pills Stethascope on Money 435x289 Georgia hospital pays $20 million to settle Medicare fraud allegationsThe Medical Center of Central Georgia will pay the U.S. $20 million to settle allegations that it violated the False Claims Act by overbilling Medicare through a scheme that charged the federal health care program for expensive inpatient services when those services should have been provided as less costly outpatient or observational procedures, the U.S. Justice Department said.

This settlement resolves a federal investigation of Medical Center of Central Georgia’s inpatient admission practices, which determined that the hospital knowingly charged Medicare for medically unnecessary inpatient admissions so that it could charge Medicare more and profit more. The Justice Department alleges that the hospital committed Medicare fraud in this fashion from 2004 to 2008.

The Medical Center of Central Georgia, located in Macon, is the second-largest hospital in the state.

The Justice Department said that systematically overcharging for patient services results in “substantial financial harm to Medicare.”

“Charging the government for higher cost inpatient services when the patient care received was outpatient or observation services causes Medicare to pay more than it should,” said Principal Deputy Assistant Attorney General Benjamin Mizer of the Justice Department’s Civil Division. “This department will continue its work to stop abuses of the nation’s health care resources and to ensure patients receive the most appropriate care.”

Under the terms of the agreement, the hospital will also enter into a corporate integrity agreement with the U.S. Department of Health and Human Services, which will require it to implement a number of compliance measures over the next five years. That requirement mandates that the hospital retain a panel of independent reviewers to assess the accuracy of the company’s claims for services it provides to beneficiaries of Medicare and other taxpayer-funded health care programs.

“Unnecessarily admitting patients who could have been treated in an outpatient or observation setting is not only a waste of taxpayer dollars, but a fundamental breach of trust,” said Health and Human Services Special Agent Derrick Jackson in Atlanta. “Medicare beneficiaries must feel secure and know that the care selected for them is in their best interest, and not merely what will generate the most revenue for the facility.”

The U.S. came to the settlement through enforcement of the False Claims Act, one of the most effective tools the government has to combat fraud against taxpayer-funded programs and agencies. Most False Claims Act cases are initiated by whistleblowers who have the authority under the Act to sue on behalf of the government.

The case against the Medical Center of Central Georgia was the result of a probe conducted by the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a cooperative effort between the Justice Department and Health and Human Services.


U.S. Department of Justice