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Carthage hospital settles Medicare fraud suit, will repay $750k

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CARTHAGE — Carthage Area Hospital has agreed to pay $750,000 over five years to settle a civil action brought Wednesday by the federal government over allegations the hospital double-billed Medicare for the same services over a four-year period.

Richard S. Hartunian, U.S. attorney for the Northern District of New York, said in a prepared statement Thursday that his office has settled the suit brought under the False Claims Act in which the government alleged that the hospital had filed about 1,900 fraudulent claims from Sept. 1, 2006, to June 30, 2010. The hospital also released a statement saying the action had been resolved.

According to Mr. Hartunian’s statement, the hospital cooperated fully with an investigation into the overbilling and, while the government was entitled to seek triple the amount of damages, plus fines and penalties, the settlement reflects only actual damages, or the amount of the excess billing.

“Health care fraud is a priority for the Department of Justice and this office,” Mr. Hartunian said in his statement. “This settlement reflects an appropriate resolution of this case in light of the circumstances.”

A statement from Natalie M. Burnham, the hospital’s spokeswoman, said Carthage Area Hospital has been working diligently for “the last few years” with the Department of Health and Human Services, which administers Medicare, to correct “errors” made in Medicare reimbursements “that were discovered to have occurred under the hospital’s previous administration.”

Mrs. Burnham said that once the errors were brought to Carthage Area Hospital’s attention, the hospital conducted a self-audit and reported its findings to HHS and the U.S. attorney’s office. The hospital’s statement said paying back the money over five years would allow the hospital “to make the payments in a manner that would not negatively impact its operations.” The statement indicated that the matter had been resolved before the suit was filed Wednesday, but that filing the complaint “was deemed necessary by the U.S. Attorney to implement the settlement agreement.”

The case involved allegations that the hospital submitted reimbursement codes to Medicare using codes that showed that a medical procedure had occurred in both the hospital’s ambulatory surgery center and its operating room, thus resulting in the hospital being paid twice for the same procedure. The claims are paid by federal funds.

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