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Justice News

Department of Justice
U.S. Attorney’s Office
District of Kansas

Friday, May 31, 2019

Kansas Hospital Agrees to Pay $250,000 To Settle False Claims Act Allegations

KANSAS CITY, KAN. – U.S. Attorney Stephen McAllister announced today that Coffey Health System has agreed to pay the U.S. government $250,000 to settle claims that it violated the False Claims Act.

Coffey Health System (“CHS”) operates a twenty-five bed critical access hospital located in Burlington, Kan. The United States alleged that Coffey Health System falsely attested that it conducted and/or reviewed security risk analyses in accordance with requirements under a federal incentive program for the reporting periods of 2012 and 2013.

The government contended that the hospital submitted false claims to the Medicare and Medicaid Programs pursuant the Electronic Health Records (EHR) Incentive Program. The American Recovery and Reinvestment Act of 2009 established the program to encourage healthcare providers to adopt and demonstrate their “meaningful use” of EHR technology. Under the program, the U.S. Department of Health and Human Services (HHS) offers incentive payments to healthcare providers that adopt certified EHR technology and meet certain requirements relating to their use of the technology. To obtain the payments, providers must attest that they satisfy applicable HHS-adopted criteria, including measures for analyzing and addressing security risks to electronic health records.

“Medicare and Medicaid beneficiaries expect that providers ensure the accuracy and security of their electronic health records,” said United States Attorney Stephen McAllister. “This office remains committed to protecting the federal health programs and to hold accountable those whose conduct results in improper payments.”

Steve Hanson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Kansas City Region, stated, “Providers who fail to properly ensure the security of electronic health records must be held accountable.”

The settlement announced today resolves allegations in a lawsuit filed by Bashar Awad and Cynthia McKerrigan, in the United States District Court for the District of Kansas. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action; Awad and McKerrigan will receive approximately $50,000.

This matter was investigated by the U.S. Department of Health and Human Services – Office of the Inspector General (HHS-OIG) and the United States Attorney’s Office for the District of Kansas. The United States was represented by Assistant U.S. Attorney Jon Fleenor.

The case is captioned United States ex rel. Awad et al. v. Coffey Health System, 2:16-CV-03034 (D. Kan.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Health Care Fraud
Updated May 31, 2019