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Feds claim Carthage Area Hospital filed fraudulent Medicare claims

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CARTHAGE — The federal government claims Carthage Area Hospital filed about 1,900 fraudulent Medicare claims over a four-year period and is asking that the hospital reimburse the government three times the amount it received.

Federal attorneys, on behalf of the Department of Health and Human Services and its component, Centers for Medicare & Medicaid Services, filed suit Wednesday against the hospital in U.S. District Court, Syracuse, claiming the facility “engaged in a pattern and practice of submitting false claims for payment to Medicare” between Sept. 1, 2006, and June 30, 2010. According to the complaint, the hospital “derived a substantial portion of its revenues” from the Medicare program during this period.

Medicare is a federally funded program that helps people over the age of 65 and people with disabilities pay their medical bills. One part of Medicare, “Part A,” pays for institutional care, including at hospitals, for eligible patients. HHS, along with its component agency, runs the Medicare program, including Part A. All of the claims at issue in the lawsuit were submitted by Carthage Area Hospital pursuant to provisions of Part A, according to the complaint.

During the period specified in the action, the hospital was a Medicare “provider,” meaning it had an agreement with Medicare that it may treat Medicare patients and bill Medicare for their treatment, “but only if the hospital billed Medicare according to Medicare rules,” the complaint states. HHS reimbursed the hospital for Part A services through Medicare contractors referred to as “fiscal intermediaries.” The intermediaries are private insurance companies that are responsible for determining payment amounts to be made to providers. Under contract with HHS, the intermediaries review, approve and pay Medicare bills, or “claims,” received from hospitals that treat Medicare patients. The claims are paid with federal funds.

According to the complaint, Carthage Area Hospital submitted claims for payment to intermediaries in which the hospital assigned and listed revenue codes, as well as other patient information, for the departments within the hospital where procedures occurred. Revenue code “490” reflects procedures that occurred in the hospital’s ambulatory surgery center and code “360” reflects procedures that were done in the operating room.

The federal government alleges that the hospital on numerous occasions submitted dual payment claims for a single service or procedure, with codes indicating the procedure occurred in both the ambulatory surgery center and the operating room. The government claims that it is a violation of Medicare statutes, regulations and guidelines to claim revenue codes “490” and “360” for the same service or procedure.

“Carthage acted with reckless disregard for the truth, or with deliberate ignorance of the truth or falsity of their claims, when they knowingly submitted claims to the Medicare program that falsely identified revenue codes 490 and 360,” the government claims in its complaint.

The government claims that the hospital used the allegedly false records or statements to get fraudulent claims paid or approved by the government. The government claims that it has been damaged in an unspecified amount and that, under the federal False Claims Act, it is entitled to triple the amount of whatever damages may be proven. It also claims it is entitled to a civil penalty for each violation, with the government claiming the hospital filed about 1,900 false or fraudulent claims.

Hospital Chief Operating Officer Richard A. Duvall, who was not named to that position until 2011, could not be reached for comment Wednesday.

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