Hawaii Hospital Pays $451,000 to Settle Allegations of Medicare and Medicaid Fraud

The story is all too familiar. In fact, I told it in my very last blog post, when I discussed False Claims Act allegations against Vanderbilt University Medical Center. Like Vanderbilt, Wahiawa General Hospital of Honolulu is accused of charging for physicians to supervise student doctors — when in fact the doctors were not supervising as much as the hospital claimed they were. Vanderbilt is denying the claims, but the Hawaii hospital has agreed to pay $451,428 to settle the allegations that it defrauded Medicare and Medicaid.

(As a whistleblower lawyer, I was quite curious as to how the parties arrived at such an unusual number, but I was not able to find an answer.)

In both the Vanderbilt and the Wahiawa General cases, the Government learned about the Medicare fraud thanks to a whistleblower.

Both Vanderbilt and Wahiawa also have been accused of billing as if doctors were supervising patient treatments, when in fact non-doctors were actually performing the medical work. The type of medicine changed, but not much else. In the case against Vanderbilt, the Vandy Medical Center is accused of billing as if doctors had performed anesthesia on surgical patients, when in fact student doctors and nurse anesthetists were doing the work and the doctors who were supposed to be supervising them were not actually present. Wahiawa General is charged with using a similar scheme in its Family Practice Residency Program, associated with the John A. Burns School of Medicine.

According to lawyers for the Government and for the physician whistleblower who brought the lawsuit, Wahiawa was using codes that a hospital only should use when a doctor performs a procedure. (Medicare reimburses doctors and hospitals according to “codes” set for each procedure. Medicare reimburses more for some codes than for other codes. Obviously Medicare depends on hospitals and doctors to properly code the procedures.) The higher billing codes were only justified if the Wahiawa General doctors were providing a certain amount of supervision for the resident doctors who performed the procedures.

When the whistleblower filed an FCA suit and claimed that the doctors were not supervising the procedures as much as the hospital was claiming they were, the Government asked the hospital to provide documentation that would support its billing. Apparently the hospital was not able to support its claims, and the patient records in fact did not show that physicians were offering enough supervision to merit the codes the hospital was billing to Medicare and Medicaid. Additionally, sometimes the hospital bill used a code for services that did not match the services that the doctor described in the patient’s chart.

The federal government and the State of Hawaii will share in the recovery. Because the states pay part of the cost of Medicaid, both federal and Hawaii taxpayers were overcharged as a result of the hospital’s upcoding and overbilling. Congratulations to Hawaii, which was wise enough to enact a Hawaii False Claims Act so that it could aid in the recovery of these amounts.

The whistleblower in this case was a doctor who had worked at an out-patient clinic sponsored by Wahiawa General, the Physicians Center at Mililani. Under the False Claims Act, a whistleblower who brings a successful suit is entitled to receive a percentage of what the Government gets. Here, the Government will be paying $84,642.75 to the whistleblower, and in addition Wahiawa General will pony up for $75,000 in attorney fees.