BOSTON (Legal Newsline) - A Massachusetts health system will pay $1.75 million to the state Medicaid program over allegations that it improperly billed the program, Attorney General Maura Healey said Monday.


Hallmark Health Systems agreed to the settlement after allegedly over-billing MassHealth for some inpatient admissions to its hospitals between March 2008 and December 2013.

Hallmark allegedly used a specific default code to indicate that some Medicaid patients had received “short-stay inpatient services” even though outpatient services would have been better, Healey said.


“Improper billing to MassHealth hurts taxpayers and undermines the integrity of our healthcare system,” the attorney general said. “Our office is committed to working with our partners to lower health-care costs and stop practices that impose unlawful or unnecessary costs on MassHealth.”


Hospitals are reimbursed a flat rate through MassHealth for all non-physician inpatient services provided for the first 20 days of admission. Outpatient services are reimbursed at lower rates. MassHealth has guidelines to help hospitals determine if inpatient or outpatient services would be needed.


A lawsuit filed by Healey’s office alleged the hospital’s practice of receiving refunds for certain types of inpatient services violates those guidelines, and that each admission should be reviewed on a case-by-case basis.

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