The embattled Yale-New Haven Hospital, already mired in a decade-long tussle over the unionization of its workers, will pay a fine of $3.78 million to the U.S. Department of Justice in order to settle allegations of Medicare fraud.
The hospital did not admit any liability in the settlement, which was announced March 7 by U.S. Attorney Kevin O’Connor.
From 2000 to 2005, the hospital overbilled Medicare for infusion therapy, chemotherapy administration and blood transfusion services performed on patients, federal prosecutors alleged. The hospital’s Oncology Infusion Service was also accused of dispensing medication and conducting laboratory studies without the order of a physician.
Medicare only allows payment for one unit of infusion therapy, chemotherapy or blood transfusion services per patient per day, according to the Justice Department. But the hospital nevertheless billed Medicare as often as five times per day for individual patients, a violation of the False Claims Act, prosecutors said.
“The health care system relies on hospitals to bill Medicare honestly and accurately,” O’Connor said in a statement. “Billing Medicare for inflated charges relating to chemotherapy services and blood transfusion services damages the fiscal integrity of the Medicare program. In addition, relevant regulations require hospitals to properly document a physician’s orders for medication and laboratory studies.”
The hospital cooperated fully in the investigation, O’Connor said. The settlement was reached to avoid the uncertainty and expense of litigation, the hospital and the Justice Department said.
In a statement, the hospital said it was pleased with the agreement.
“It is the result, in large part, of a proactive, voluntary disclosure by Yale-New Haven Hospital to ensure compliance with Medicare guidelines,” the statement read. “This matter has no bearing on the nature and quality of services that the Hospital provided.”
In an attempt to assess the extent to which the hospital was meeting technical requirements regarding billing and documentation, the hospital hired an outside consultant to verify conformity with all government guidelines and then voluntarily reported its findings to the U.S. Department of Health and Human Services.
“Upon submission of the Hospital’s self-report, HHS and DOJ conducted further reviews, resulting in this settlement,” the hospital said in the statement.
It was not the first such settlement for the hospital. In 2001, the hospital agreed to a $1.4 million settlement with the Justice Department for accepting millions of dollars in what were deemed to be improper Medicare reimbursement payments in the 1980s.
In fact, this week’s $3.78 million fine was not even the largest the hospital has been assessed in the past year.
In October, an independent arbitrator ordered the hospital to pay employees and the union seeking to organize them no less than $4.5 million in damages. “The employer’s conduct,” the arbitrator wrote in her order, “was a methodical dismantling of the terms and commitments” that the hospital had agreed to for holding a fair election.
O’Connor, meanwhile, is having a slightly better year.
After a brief stint as chief of staff to former U.S. Attorney General Alberto Gonzales, O’Connor is now poised to capture the third-ranking post in the Justice Department. Earlier this month, the Senate Judiciary Committee approved his nomination to be associate attorney general, and the Senate is expected to follow soon.