36 Healthcare Fraud Cases

A Death in the Hospital /Articles /36 Healthcare Fraud Cases

1. New York Presbyterian Hospital

The Columbia Presbyterian Division paid $480,000 in 2003 for improper billing as well as upcoding. Currently, the Government is demanding $8,000,000 in back payments for improper billing of medical trainee costs.

The Weill Medical College division paid $4,400,000 for misuse of funds awarded by the National Institutes of Health.

2. Yale University School of Medicine

In 1999 paid $5,500,000 to the Medicare Program for allegedly providing care by medical residents without proper supervision by attending physicians in violation of PATH regulations.

Another example of this pattern of putting financial considerations ahead of patient safety, Yale had to pay another $5,500,000 in settlement of a lawsuit brought by staff Radiologists who alleged that the Medical Center was permitting inadequately trained staff to read x-rays.

3. Johns Hopkins University School of Medicine

In 2003 paid $800,000 for violations of the PATH regulations to Medicare. In 2004 they paid $2,600,000 for noncompliance with federal research grants charging the Government more than was actually spent.

4. Harvard University Hospitals

In 2003, a $75,000 fine for PATH violations at the Massachusetts General Hospital for patient care delivered by residents that was unsupervised by any attending physicians.

Beth Israel – Deaconess, in 2002, paid $5,400,000 for improper billing to Medicare and procedures performed with experimental cardiac devices that were not approved by the FDA. 

Harvard and Beth Israel Hospitals, in 2004, paid $2,400,000 for misuse of research and training grants. The Massachusetts General Hospital had to repay the State Medicaid program $1,5000,000 for double billing in 2002. The Attorney General Reilly commented “In tough state budget times when programs are being slashed and the Medicaid budget is stretched to it’s limits, it is crucial that providers who receive overpayments return them to the Commonwealth.”

5. The Cleveland Clinic

In 2003, paid $4,000,000 to Medicare for claiming that supervising doctors had performed services that had actually been performed by medical trainees. 

In 2004, $2,300,000 was paid for false cost reporting (in the Home Care division).
The Cleveland Clinic Florida Hospital in 2005 had to pay $2,750,000 to settle allegations that they had billed for services that were actually to which they were not entitled.

6. University of Illinois College of Medicine and University of Chicago Hospitals

In 2003, the University settled a lawsuit for $2,000,000 with the Federal Government and the State of Illinois for allegedly exaggerating the seriousness of the medical conditions of liver disease patients. The alleged goal was to perform liver transplants on patients who were not currently in need of a transplant. This was to insure the Hospital performed the required number of transplants necessary to maintain their Medicaid and Medicare Certification. The alleged end result was that patients who did need transplants in other facilities might not get them. Similar allegations were “settled” against Northwestern Memorial Hospital for $23,587 and the University of Chicago Hospital for $115,000 The actions were brought by Patrick J. Fitzgerald, United States Attorney.

In November, 2005, the State of Illinois joined a “Whistleblower Suit” against the University of Chicago Hospitals. The allegations are that at Chicago-Comer Children’s Hospital from 1997-2005, the Hospital routinely ignored State regulations regarding the distance infants must be kept from one another in the neonatal ICU. This is called “double-bunking” and places infants at risk due to the risk of spreading infection. The Hospital is alleged to have “double-bunked” neonates in order to inflate their reimbursement from Medicaid.

7. St. Louis University (a Tenet Hospital)

In 2003, paid $1,800,000 to Medicare to settle allegations that services were provided by unsupervised medical trainees in violation of PATH regulations.

8. Montefiore Hospital and Medical Center

In 2004, Montefiore paid $12,000,000 to settle allegations that the Hospital failed to repay it’s debt to Medicare and that it had conspired to hide this debt for 6 years. The Hospital had allegedly misstated it’s costs to Medicare and when the overpayment was discovered through an audit, it then allegedly conspired not repay the money.  $5,600,000 was simply erased from their books, and they refused to pay another debt of $4,200,000.

9. University of Washington

In 2004, paid $35,000,000 for overbilling Medicare; billing work retroactively to Medicare; and billing Medicare for work performed by medical trainees as though performed by attendings.

This is the largest teaching hospital settlement that exceeds the $30,000,000 paid by the University of Pennsylvania in 1995. (see below)

10. Kaiser Permanente

In 2005, paid $1,000,000 to Medicare for false claims after previously paying $900,00 for inaccurate Medicaid claims.

In 2003, Kaiser settled a lawsuit (the details were kept under seal) by several consumer groups that they “tied a significant portion of doctors’ pay to meeting quotas to limit medical services and applied quotas for doctors to reduce the number of patients hospitalized regardless of medical need.”

In 2005, a former Kaiser doctor filed a lawsuit that he was fired after charging that “cost-cutting moves put patients’ lives in danger…” In order to save costs, the Doctor alleged that in “…case after case patients were denied and delayed care and suffered gross misdiagnosis with serious harm.”

The Kaiser Papers is a comprehensive source to review the vast extent of malpractice (and worse) conducted by the Kaiser organization.

11. New York University Hospitals

 In 2004, paid $2,100,000 for false claims for obstetrical services provided by midwives, unattended residents, and uncredentialed doctors.

12. University of Pennsylvania (Clinical Practice)

For the years 1989-1994, triple damages of $30,000,000 were paid to the Government for unsupervised medical trainee services as well as “upcoding” (that is, billing for more complex level of care than provided).

In 2005, the University had to pay the Government $1,000,000 for misrepresenting the toxicity of gene studies when the study should have been terminated (in response to the death of a teenager undergoing gene therapy).   “Among the alleged lapses were repeated failures to halt the experiment when serious toxicities first arose; failure to fully disclose the study’s dangers in informed-consent documents; and statements falsely suggesting that earlier patients in the study had benefited from the treatment.”

Details of the allegations against the involved physicians, who, if the allegations are true, were acting entirely like “Nazi Physicians” can be found on the CIRCARE website of the father of Jesse Gelsinger (the deceased “gene therapy” patient)

13. State University of New York, Health Science Center (SUNY) Brooklyn 

In 2003, paid $655,000 for PATH allegations (faculty not personally involved in care delivered by trainees).

14. Northwestern University

In 2003, paid $5,500,000 for overstating the percentage of researcher work on federal grants

15. San Diego Hospital Association

In 2003, paid $6,200,000 for misstating organ acquisition costs for 1981-1999.

16. Fort Collins Hospital (Colorado)

Paid $2,900,000 in 2003 for Home Health Care reporting fraud and double billing on physical therapy.

17. St. Mary’s Hospital (Grand Junction, Colorado)

Paid $1,250,261 in 2002 for Pneumonia upcoding 

18. University of Colorado Hospitals

In 2005, had to pay Medicare/Medicaid/Tri Care Champus $755,000 for overbilling. This was after previously paying $1,200,00 for Medicare overbilling in 2001

19. Methodist Hospital  (Houston)

In 2003, paid $2,750,000 for improper billing to Medicare for procedures using unauthorized experimental cardiac devices.

20. Hackensack University Medical Center

In 2002, paid the Government $314,000  for unauthorized procedures using experimental cardiac devices. 

21. Blue Cross of California

Paid the Government $9,250,00 for falsification of cost report audits to Medicare in 2002.  

22. Catholic Healthcare West

In 2001, paid $10,750,000 for improper charges to Medicare for unauthorized experimental cardiac devices.

23. The Regents of the University of California (scroll down to 2/2/01 and 2/21/01 on linked document)

In 2001, the Regents were required to pay the Government $2,300,00 for PATH violations. Also, in the same year, a total of $22,500,000 had to be paid by UC Davis, UC San Fransisco, UC Los Angeles, UC Irving, and UC San Diego also for claims submitted to Medicare for services provided by unsupervised medical trainees, undocumented bills, as well as billing irregularities.

24. Loma Linda University

In 2004, $2,200,000 was paid to the Government for PATH to settle allegations of PATH violations.

25. Texas Tech University Health Sciences

In 2001, paid the Government $2,300,000 for PATH allegations and upcoding.

26. State University of New York (SUNY) Stony Brook

Paid $850,000 for double billing for pharamaceuticals.

27. The Mayo Foundation

In 2005, $6,500,000 was paid to the Government for charging costs that were unrelated to research projects that were sponsored by federal grants.

28. The University of Medicine and Dentistry of New Jersey

In 2005, $1,407,448 was paid to settle PATH allegations.

29. Staten Island University Hospital

In 2005, $76,500,000 had to be paid to settle allegations of Medicaid overbilling.

30. Temple University

In 2004, $1,875,000 was paid to settle PATH allegations.

31. Tenet Healthcare Corporation

One of the nation’s largest hospital management firms, Tenant has paid millions upon millions of dollars in settlements over the years since its founding as National Medical Enterprises in 1964.  These abuses include not only fraud, but also multiple cases in which their practices led to the harm of patients. These include kidnapping of patients to be admitted to their psychiatric facilities, use of unnecessary cardiac procedures, and suspicious patient deaths.

A recent settlement was reached with the Government for nearly a billion dollars for accusations that it overbilled Medicare, made illegal kickbacks to doctors who were encouraged to send patients to their hospitals, and that false codes were used to bilk the program.  

32. Ascension Health

This is the largest Catholic not-for-proft healthcare chain in the United States. In November, 2003, it had to pay $1,600,000 to settle charges of Medicare fraud. An examination of the allegations reveals much more than fraud. These include implanting carotid stents that were investigational and medically unnecessary as well stenting of renal arteries that was also medically unnecessary.  These allegations mean that profit was placed above life.

33. St. Barnabas Healthcare System

This is New Jersey’s largest private hospital management firm. It had to repay $265,000,000 to Medicare for alleged overbilling.  The government investigators believed the overbilling was far higher but did not seek criminal charges since it did not want to put the hospital chain out of business.  Leslie Wise, the special agent in charge of the investigation said. “St. Barnabas was a man who gave up his worldly wealth to help others.  If her were alive today he would be ashamed.”

34. McKesson

This major drug wholesaler had to pay $7,400,000 as part of a guilty plea that it had attempted to obstruct a federal audit.  They had prepared “dummy invoices” that made it appear they were charging for feeding tubes. The tubes were actually free.  Multiple nursing homes would then use the fake invoices to bill the government for the free tubes.

McKesson also had to pay $3,000,000 to settle a claim that they had bilked the Department of Defense (charging more money for drugs than was allowed.)

The company was also required to sign a five-year integrity agreement.

35. Our Lady of Lourdes Regional Medical Center

“…will be charged $3.8 million for defrauding Medicare and Medicaid.  However, the hospital says it didn’t knowingly defraud the program.  The charges relate to Dr. Mehmood Patel, a doctor who allegedly performed hundreds of unnecessary heart procedures at the hospital until a whistleblower filed suit against him.  Lourdes revoked Patel’s hospital privileges in 2004 and turned him over to authorities, but prosecutors say the hospital knew there were problems for years and did nothing. “At a minimum, Lourdes recklessly disregarded  its responsibility to ensure that it had processes in place to detect the kinds of things we uncovered,” U.S. Attorney Donald Washington told The Daily Advisor. The hospital said it will step up its oversight as a result of the incident. Patel has already been indicted and will stand trial in 2007”

It was reported by the Associated Press that in fact the hospital agreed to “settle” the above allegations for $7.4 million (to be divided between 305 patients and the lawyers).  Dr. Patel awaits trial.

36. New York State

Until 2007, the Hospitals in the State were receiving Federal Medicaid money for student physicians who did not even exist. These are known as “phantom docs,” that is trainee physicians who exist only on paper.  The number of medical trainee physicians has declined over the years and New York State Hospitals were reporting numbers of trainees whom they had in the early 1980’s but no longer have now.  The overcharge to Medicaid with the inflated number of “phantom docs” amounted to 80 million dollars in 2006.