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Hospitals Pay $2.3 Million Settlement for Overcharging Medicare


Two California healthcare systems have paid a $2.3 million settlement regarding allegations of overcharging the federal Medicare program for services, the U.S. Attorney's Office said.

Sutter Health Association paid $1.4 million and Catholic Healthcare West paid $875,564, U.S. Attorney Benjamin B. Wagner said Wednesday.

The two healthcare systems overcharged the federal Medicare program for infusion therapy and lithotripsy services, Wagner said.

Infusion therapy entails administering medicine through a needle or catheter and lithotripsy is a procedure that uses shock waves to break up stones in the kidney, bladder or ureter.

The overcharging by 25 Sutter Health hospitals in Northern California happened between Jan. 1, 2002 and March 31, 2008, said Lauren Horwood, spokeswoman for the U.S. Attorney's Office in the Eastern District of California.

Thirty-six Catholic Healthcare West hospitals in California, Nevada and Arizona overcharged Medicare for the services between Sept. 3, 2003 and Dec. 31, 2007, Horwood said.

The healthcare systems overcharged Medicare through duplicate billing for infusion therapy, unbundling packaged infusion therapy services when the individual procedures should have been billed as a group and duplicate billing of lithotripsy services under separate revenue codes, Horwood said.

Catholic Healthcare West is the fifth largest hospital provider in the country and the largest in California.

The investigation began when the U.S. Department of Health and Human Services' Office of Audit Services discovered the overbilling when it analyzed data. The investigation took one year, Horwood said.

"Although we have had bigger settlements with healthcare systems, this is a significant settlement," Horwood said.

No criminal charges were filed against the healthcare systems, which did not admit wrongdoing, and the allegations were settled out of court, Horwood said.

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