Oroville Hospital, located in Oroville, California has agreed to pay $10,250,000 to settle allegations of submitting false claims to Medicare and Medicaid.
The claims involved unnecessary hospital admissions, a kickback and physician self-referral scheme, and incorrect diagnosis codes. Of the settlement, $9,518,954 will go to the federal government and $731,046 to the State of California.
The federal government alleged that Oroville Hospital improperly admitted patients and billed Medicare and Medicaid for costly inpatient stays when outpatient or observation care would have sufficed.
Additionally, the hospital was accused of offering illegal financial incentives to full-time doctors, influencing their decisions to admit patients. These bonuses were reportedly tied to the number or value of admissions.
Oroville Hospital also allegedly submitted claims with false diagnosis codes for systemic inflammatory response syndrome (SIRS), leading to overpayments from Medicare and Medicaid.
To read the terms of the settlement click here: Oroville Hospital
“Physicians should make decisions based on the best interests of their patients, not their own personal financial interests,” said U.S. Attorney Phillip A. Talbert for the Eastern District of California. “Hospitals engaging in kickback schemes betray the trust placed in them by their communities and distort care decisions that should be untainted by illegal kickbacks. This settlement demonstrates my office’s commitment to preserving the integrity of public healthcare programs and ensuring that the well-being of patients remains paramount.”
The claims resolved by the settlement are allegations only. There has been no determination of liability.
As part of the settlement, Oroville Hospital agreed to a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG).
The agreement requires the hospital to implement a risk assessment and internal review process to address compliance risks.
Additionally, an independent review organization will annually evaluate the medical necessity and appropriateness of certain Medicare claims and review the hospital’s policies for tracking arrangements with specific referral sources.
“Health care providers that improperly bill Medicare and Medicaid for medically unnecessary services to boost profits divert taxpayer funding meant to pay for services that enrollees actually need,” said Special Agent in Charge Steven J. Ryan of HHS-OIG. “And when providers engage in improper financial arrangements, they undermine the integrity of medical decision-making. HHS-OIG, in coordination with our law enforcement partners, will continue to identify and investigate such allegations in order to protect federal health care programs and the Americans who rely on them.”
The settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Cecilia Guardiola.
Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).