Colo. AG announces $6.3M joint settlement

Bryan Cohen Jan. 5, 2012, 1:20pm


DENVER (Legal Newsline) - Colorado Attorney General John Suthers announced a $6.3 million settlement on Thursday with a Denver medical center that allegedly overbilling Medicare and Medicaid by misclassifying patients for hospital admissions.

Denver Health and Hospital Authority, doing business as Denver Health Medical Center, will pay the United States and the state of Colorado $6.3 million as part of an agreement to settle a whistleblower lawsuit. The state will receive $1,106,608 of the settlement proceeds, while the United States' share is $5,193,192. The whistleblower will receive $817,959.

"Colorado's Medicaid program provides essential health services to the neediest among us," Suthers said. "Our work to recover these funds for the state of Colorado underlines the work we do every day to police Medicaid providers. We will continue to work with our state and federal partners to ensure that no health care provider overbills public health programs, which results in fewer resources for those who need them most."

Denver Health and Hospital Authority allegedly overbilled Medicare and Medicaid by classifying certain patients incorrectly during hospital admissions. Medicare and Medicaid reimburse hospitals like Denver Health Medical Center a certain amount of money when a patient is admitted into observation or treated as an outpatient. Hospitals are reimbursed much more when a patient is admitted and treated as an inpatient.

Denver Health Medical Center allegedly inappropriately admitted patients as inpatients when those patients were more appropriately classified as outpatients or observation patients. The United States was made aware of the allegations through a whistleblower lawsuit under the False Claims Act. Due to the alleged misclassification, the Denver Health Medical Center allegedly received a higher level of reimbursement from Medicaid and Medicare than it should have.

Denver Health and Hospital Authority has cooperated with officials. As part of the settlement, the False Claims Act case has been dismissed.

The agreement is neither an admission of facts or liability by Denver Health and Hospital Authority.

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