Shands has agreed to pay $26 million to resolve allegations made under the False Claims Act that billing processes at Shands’ network of hospitals resulted in overpayments by Medicare and Medicaid.
The settlement results from a whistleblower lawsuit filed in the Middle District of Florida Jacksonville Division on April 30, 2008, which was made public this week, Shands said. The whistleblower had been hired as an independent consultant by Shands in 2006 and 2007 to conduct a routine audit of its billing practices. The audit showed inconsistent billing processes in 2006 and 2007.
Allegedly, for some patients, Shands may have billed Medicare and Medicaid for short overnight inpatient admissions rather than for less expensive outpatient or observation services. In each case of alleged overbillings, the patient received all services ordered.
“We hold ourselves accountable for the highest standards of care and service,” said Timothy M. Goldfarb, CEO of Shands HealthCare in Gainesville “The case in question does not involve the failure to provide high-quality patient care, but rather inconsistent billing processes.”
Shands officials settled in order to avoid long and costly litigation. While there has been no admission of liability, Shands HealthCare hospitals in Gainesville and Jacksonville will pay $25.2 million to the United States under the Medicare program and $829,600 to the State of Florida under its Medicaid program.
“As a responsible corporate citizen, our intent and practice has always been to comply with government regulations. We have conscientiously worked to create and operate an appropriate, fair and accurate billing system for all payers,” Goldfarb added. “There was no intentional misconduct or callous disregard of these issues on our part.”