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Monday, April 27, 2015

Georgia Hospital to Pay $20 Million to Resolve False Claims Act Allegations

The Medical Center of Central Georgia (MCCG) has agreed to pay $20 million to settle allegations that the hospital violated the False Claims Act by billing Medicare for more expensive inpatient services that should have been billed as less costly outpatient or observation services, the Justice Department announced today.  MCCG is located in Macon, Georgia, and is the second largest hospital in the state.

“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 C. 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.”

This settlement resolves the United States’ investigation into MCCG’s inpatient admission practices.  The government contends that from 2004 through 2008, MCCG violated the False Claims Act by knowingly charging Medicare for medically unnecessary inpatient admissions when the care provided should have been billed as less costly outpatient or observation services.  Because hospitals generally receive significantly higher payments from Medicare for inpatient admissions as opposed to outpatient or observation services, the admission of numerous patients whose care should have been billed as outpatient or observation services, as alleged here, can result in substantial financial harm to Medicare.

“Overcharging the government for medical services wastes our country’s limited health care resources,” said Acting U.S. Attorney John Horn of the Northern District of Georgia.  “When a provider inflates its billings, we will aggressively seek to recover the overcharges under the False Claims Act.”  

As part of this agreement, MCCG entered into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office of Inspector General (HHS-OIG) that requires the company to engage in significant compliance efforts over the next five years.  Under the agreement, MCCG is required to retain an independent review organization to review the accuracy of the company’s claims for services furnished to federal health care program beneficiaries.

“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 Special Agent in Charge Derrick L. Jackson of HHS-OIG 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.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was investigated by HHS-OIG and the U.S. Attorney’s Office of the Northern District of Georgia.  The claims resolved by this settlement are allegations only and there has been no determination of liability.

Healthcare Fraud
Updated May 19, 2016