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Dignity Health Pays $5.9M To Settle False Claims Act Allegations

SAN FRANCISCO (CBS SF) -- San Francisco-based Dignity Health settled with the U.S. Department of Justice for $5.9 million to resolve False Claims Act allegations that they improperly billed Medicare for implantation of cardiac devices, Justice Department officials announced Wednesday.

Dignity Health, and its 18 affiliated hospitals were among the most recent batch of 51 hospitals nationwide to settle with the Justice Department. In 2015, the department settled with 457 hospitals for more than $250 million. The final 51 hospitals will pay the Justice Department more than $23 million.

The settlements with all 508 hospitals stemmed from allegations by the Justice Department, and reported by whistleblowers, that hospitals improperly billed Medicare for the implantation of cardiac devices in Medicare patients in violation of Medicare coverage requirements.
Justice Department officials said that settlements have been reached but that there has been no determination of liability in these cases.

San Francisco's St. Mary's Medical Center and California Pacific Medical Center were among the 508 hospitals settled.

The Justice Department said that only patients with certain clinical characteristics and risk factors qualify for an implantable cardioverter defibrillator, covered by Medicare and that such coverage costs approximately $25,000.

The Justice Department said cardiologists, other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates recommended that such devices should generally not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty.

Prior to the implantation of a device, a waiting period must be observed, with the intention of giving the heart an opportunity to improve function on its own. However certain exceptions can override the waiting period, according to Justice Department officials.

The Department of Justice alleged that from 2003 to 2010, all 508 hospitals implanted the cardiac devices during the required waiting periods.

"The settlements announced last October and today demonstrate the Department of Justice's commitment to protect Medicare dollars and federal health benefits," said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.

Ferrer went on to say that, "In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office's most significant recoveries to date.  Our office will continue to vigilantly protect the Medicare program from potential false billing claims."

The lawsuit was filed by Leatrice Ford Richards, a cardiac nurse and Thomas Schuhmann, a health care reimbursement consultant. Justice Department officials said Richards and Schuhmann have now received more than $3.5 million from the settlements.

By Hannah Albarazi - Follow her on Twitter

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