Beth Israel Deaconess Medical Center Settles False Claims Act Allegations for $5.3 Million

The Department of Justice (DOJ) announced on July 29, 2013 that Beth Israel Deaconess Medical Center (Beth Israel), a Boston teaching hospital, will settle False Claims Act allegations for $5.3 million. Although Beth Israel did not admit to any wrongdoing, the agreement settles allegations that it knowingly billed for inpatient Medicare admissions that should have been billed at a lower outpatient rate over a four-year period from 2004 through 2008.

The False Claims Act (FCA) (31 U.S.C. 3729 et seq.) prohibits the knowing submission of a false or fraudulent claim for government approval. The government alleged that Beth Israel knowingly billed the government for Medicare inpatient stay claims for congestive heart failure, chest pain, and certain digestive and nutritional disorders, when Beth Israel knew these patients were admitted for the limited purpose of observation, would be discharged the next day, and should be billed at the lower rate for observation claims. It also alleged that Beth Israel knowingly billed Medicare at an inpatient rate for stays of less than one day that should have been billed at an outpatient or observation rate.

The investigation into Beth Israel was a coordinated effort of the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, a collaborative effort between the Departments of Justice and HHS. Since 2009, the DOJ has recovered more than $14.8 billion through FCA cases. Nearly 73 percent of that amount, or $10.8 billion, came from cases involving fraud against federal health care programs.