Hospital Pays More Than $3 Million in Whistleblower Claim Settlement

John Peter Smith Hospital recently agreed to pay $3.3 million to settle allegations of False Claims Act violations. The hospital was alleged to have upcoded claims submitted to healthcare programs to receive more money in reimbursements.

Case background

The lawsuit that prompted the FCA action originally was filed in 2018 by the former Director of Compliance for the hospital, Erma Lee. She alleged the hospital improperly used billing modifiers -25, 059 and -XU in hundreds of claims to increase payments from the government.

Lee said she alerted management at the hospital that these modifiers were being improperly used approximately 70 to 95 percent of the time, which resulted in the hospital essentially double billing the government for various elements of care. Despite these reports, JPS still allegedly failed to reimburse payors for those overpayments from improperly coded claims.

Lee filed her claim under the qui tam provisions of the False Claims Act, which allow whistleblowers who have evidence of fraud within their organization to file a lawsuit on behalf of the federal government and then collect money in any proceeds that arise from enforcement actions.

The United States government did not intervene in the case, but did investigate Lee’s allegations and worked with her counsel to ensure a sufficient resolution in the case. For her actions, Lee will receive $912,635.

Healthcare fraud is a widespread problem in the United States that results in billions of dollars of losses every year. In many cases, such incidents of fraud would not be uncovered were it not for reports made by private whistleblowers who come forward with evidence of such fraudulent schemes.

To learn more about the potential benefit of filing a False Claims Act case and how to proceed with doing so, contact an experienced whistleblower lawyer at Kardell Law Group.