Vanderbilt University Medical Center has paid more than $6.5 million to resolve a whistleblower lawsuit alleging the hospital engaged in wrongful billing practices that resulted in it receiving higher reimbursements from Medicare and Medicaid.
The settlement brings to an end a protracted dispute initiated by anesthesiologists formerly employed by VUMC. The physicians filed the lawsuit on behalf of the U.S. government and the state of Tennessee in 2011 under the whistleblower provisions of the False Claims Act. The federal government and Tennessee government declined to intervene in the case, but the whistleblowers pressed ahead with their allegations.
According to the lawsuit, VUMC wrongfully billed Medicare and Medicaid for operating room and ICU services performed by attending physicians when the services were actually performed by unsupervised medical students. Medicare and Medicaid pay for services rendered by physicians at higher rates than the same services performed by assistants or students.
The whistleblowers also alleged the hospital billed the government for anesthesia services that weren’t needed and overlapped surgeries so surgeons could bill for multiple surgeries in different operating rooms at the same time.
The lawsuit alleged that VUMC employed these billing practices from 2003 to 2011.
In addition to the financial part of the settlement, VUMC also agreed to hire a third-party consultant to audit its billing policies and procedures. A lawyer for the whistleblowers said that this component of the settlement was “very important” to the plaintiffs, according to The Tennessean.
Because the government chose not to intervene in the case, the whistleblowers are entitled to 30 percent of the total recovery – about $2 million – as a whistleblower award.