News and Press Releases

Baptist Healthcare, Inc. And Hardin Memorial Hospital To Pay $8,900,000 To Settle Improper Billing Of Medicare

FOR IMMEDIATE RELEASE
August 11, 2011

LOUISVILLE, KY – The United States Department of Justice, United States Attorneys’ Offices for the Western and Eastern Districts of Kentucky, and Office of Inspector General of the Department of Health and Human Services today announce the $8,900,000 settlement with Baptist Healthcare Systems, Inc. and Hardin County, Kentucky d/b/a Hardin Memorial Hospital. As part of this settlement, Baptist Healthcare Systems, Inc. has agreed to pay the United States $5,785,000 to resolve claims that the company improperly billed Medicare. Hardin Memorial Hospital, under the management of Baptist Healthcare Systems, Inc., has agreed to pay the United States $3,115,000 to resolve claims that the hospital improperly billed Medicare.

“This settlement will return a significant amount of money back to the Medicare Trust Fund that should never have been paid out,” said Derrick L. Jackson, Special Agent in Charge of the Atlanta Region for the Office of Inspector General of the Department of Health & Human Services. “Protecting the Medicare trust fund remains a top priority for the Inspector General and U.S. Attorneys’ Offices.”

According to the settlement agreement, the United States contends that Baptist Healthcare Systems, Inc. and Hardin Memorial Hospital improperly billed Medicare by submitting claims for a number of hospital billing codes (called “DRG” or Diagnostic Related Group codes) for certain serious conditions. The United States contended that the billing of inappropriate codes by Hardin Memorial Hospital and five other Kentucky hospitals owned by Baptist Healthcare Systems, Inc. resulted in higher reimbursement rates than warranted by the actual condition of patients treated at the hospitals. The DRG codes targeted by this settlement generally related to respiratory infections and inflammations, pulmonary edema (fluid accumulation in the lungs), respiratory failure, and septicemia (blood infections). The allegedly improper billing covered by the settlement agreement occurred between January 1, 2001, and December 31, 2006.

The hospitals whose conduct was the subject of these claims were Hardin Memorial Hospital, located in Elizabethtown, Kentucky, and five hospitals owned by Baptist Healthcare Systems, Inc.: Baptist Hospital East, located in Louisville, Kentucky; Western Baptist Hospital, located in Paducah, Kentucky; Baptist Hospital Northeast, located in LaGrange, Kentucky; Central Baptist Hospital, located in Lexington, Kentucky; and Baptist Regional Medical Center, located in Corbin, Kentucky.

The legal claims released in the settlement agreement were the United States’ claims for payment by mistake and unjust enrichment. In agreeing to the settlement, Baptist Healthcare Systems, Inc., and Hardin Memorial Hospital made no admission of liability. No issues concerning quality of patient care were raised as part of this settlement.

According to the settlement agreement, the settlement is to be paid no later than September 1, 2011.

The matter was handled by Assistant United States Attorney Benjamin S. Schecter of the Western District of Kentucky, Assistant United States Attorney Andrew Sparks of the Eastern District of Kentucky, and the Department of Justice Commercial Litigation Branch. The investigation was conducted by the Office of Inspector General of the Department of Health and Human Services and AdvanceMed Corporation, Medicare’s Program Safeguard Contractor for Kentucky.

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