Memorial Hermann Health System to Pay Nearly $2 Million to Resolve Improper Billing Allegations

HOUSTON – One of Houston’s largest health care providers has agreed to pay the United States $1,929,071.38 to resolve allegations that it improperly billed government healthcare programs, announced U.S. Attorney Ryan K. Patrick. The allegations include inappropriately billing for inpatient services provided to Medicare beneficiaries who were admitted for scheduled surgical procedures, but should have been treated in a less expensive outpatient or observation setting.

“Charging the government for higher cost inpatient services when patients only require lower cost outpatient services is a waste of taxpayer money and a violation of trust with the patient and with the government,” said Patrick. “This settlement should deter similar conduct in the future and help make health care more affordable.”

The government alleged that from Jan. 1, 2009, through Dec. 31, 2014, three Memorial Hermann Health System (MHHS) hospitals -  the Texas Medical Center, Southwest and Memorial City - submitted claims to Medicare for scheduled surgical procedures in which the patient’s hospital stay lasted two days or less as inpatient services. The claims should have been submitted as outpatient services. This allegedly caused these three hospitals to receive more in reimbursements from the Medicare program than they were entitled to collect. These payments were mistakenly made and caused MHHS to be unjustly enriched, entitling the United States to compensation.

This settlement is a representation of the coordinated efforts of the U.S. Attorney’s Office, Department of Health and Human Services (DHHS) - Office of Inspector General and DHHS - Office of Audit Services to combat healthcare fraud and abuse.

The claims resolved by this agreement are allegations only, and there has been no determination of liability. 

Assistant U.S. Attorney Andrew A. Bobb handled the matter on behalf of the Southern District of Texas.