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Press Release

Beth Israel Deaconess Medical Center To Pay $5.3 Million To Resolve Improper Medicare Claims

For Immediate Release
U.S. Attorney's Office, District of Massachusetts
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BOSTON – United States Attorney Carmen M. Ortiz and Susan J. Waddell, Special Agent in Charge of the Department of Health & Human Services, Office of Inspector General announced today that Beth Israel Deaconess Medical Center (BIDMC), a teaching hospital located in Boston, has agreed to pay the United States $5.315 million to settle allegations that it violated the False Claims Act by billing Medicare for inpatient admissions that should have been billed as lower reimbursed outpatient or observation services. The improper claims were submitted from June 1, 2004, through March 31, 2008.

The settlement resolves government allegations that BIDMC inappropriately submitted claims to Medicare for one-day stay inpatient admissions for patients with congestive heart failure, chest pain, and certain digestive and nutritional disorders. These claims should have been billed as observation services as the patients were briefly admitted for the limited purpose of observation and discharged the next day. In addition, the settlement resolves allegations that BIDMC submitted claims to Medicare for less-than-one day (zero day) stays that should have been billed as outpatient or observation services. Medicare reimburses hospitals, like BIDMC, at significantly higher amounts for inpatient admissions compared to outpatient or observation services. BIDMC has not admitted liability or wrongdoing in connection with the settlement.

“Today’s settlement furthers two critical purposes: ensuring that precious federal health care dollars are spent appropriately and in accordance with the law, and emphasizing that patient needs, not the bottom line, must be the basis for treatment decisions,” said U.S. Attorney Ortiz.

"When hospitals unnecessarily admit Medicare patients for short inpatient stays when the appropriate treatment would be outpatient or observation care, they improperly boost hospital profits at significant expense to taxpayers and patients," said HHS-OIG's Waddell. "We are committed to uprooting such schemes to eliminate waste in federal health care programs."

This settlement illustrates the government's continued 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 2009 by Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius. 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 2009, the Justice Department has recovered a total of more than $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was investigated by Investigator Kristen Israelson of the Department of Health & Human Services, Office of Inspector General, Boston Regional Office of Investigations. It was handled by Assistant U.S. Attorney Jennifer Cardello and Special Assistant U.S. Attorney John O’Brien, both from Ortiz’s Affirmative Civil Enforcement Unit, and Senior Trial Counsel Marie Bonkowski of the Commercial Litigation Branch of the Justice Department's Civil Division.

Updated December 15, 2014