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UPMC Inks $2.5M Deal To Settle Neurosurgery FCA Claims

Law360, New York (July 27, 2016, 6:44 PM EDT) -- The University of Pittsburgh Medical Center has agreed to pay more than $2.5 million to the federal government to settle whistleblowers’ claims that some of its neurosurgeons billed Medicare for participating in surgeries in which they weren’t sufficiently involved, in violation of the False Claims Act.

The qui tam suit in Pennsylvania federal court alleges the neurosurgeons billed for assisting in or supervising procedures by other surgeons, residents, fellows and physician assistants that they weren’t participating in to the required degree, according to the U.S. Department of Justice. The hospital didn’t admit any liability as part of the settlement.

“Today’s settlement demonstrates our commitment to protecting federal health care programs from fraud,” U.S. Attorney David J. Hickton said in a statement. “By pursuing False Claims Act cases like this, we send a clear message that health care providers must follow the rules when they deal with federal health care programs, and that this office will hold accountable those who do not.”

The settlement also applies to allegations that one neurosurgeon billed Medicare for levels of spinal decompression not performed during multilevel spinal surgeries, the DOJ said. UPMC said in a statement Wednesday that the bills were submitted to Medicare, Medicaid and Tricare by the three UPMC-affiliated professional services entities — the University of Pittsburgh Physicians, UPMC Community Medicine Inc. and Tri-State Neurosurgical Associates UPMC Inc. — which also signed into the settlement, and were not submitted by the physicians themselves.

“UPMC discovered the billing discrepancies, disclosed the errors to the United States attorney's office, conducted an internal review and fully cooperated with the government's review,” the hospital said. “UPMC took steps to strengthen the processes and practices in the billing systems that had allowed incorrect billing.

Under the settlement, UPMC admits no liability.”

The suit was brought in February 2012 by UPMC neurosurgeon J. William Bookwalter III, UPMC neurological surgery professor Dr. Robert J. Sclabassi and UPMC employee Anna Mitina. The government did not intervene in all claims, so some are outstanding after the settlement. Among those additional claims are allegations that the hospital provided kickbacks in the form of bonus payments to physicians who did more complex procedures, as defined by how many so-called relative value units, or wRVU, are assigned to the procedure. The hospital then makes money through the more complex, but often medically unnecessary, surgeries, according to the amended complaint.

"This compensation model has created a culture within the Department of Neurosurgery whereby individual department members are incentivized to increase and inflate wRVU production for their own, personal financial gain and for that of defendant UPMC," the amended complaint states.

The hospital said Wednesday that, "given that the government has declined to intervene, if the whistleblowers choose to pursue their lawsuit without the government, UPMC will defend the matter vigorously."

The government is represented by Assistant U.S. Attorneys Colin J. Callahan and David Lew.

The relators are represented by Andrew M. Stone of the Stone Law Firm LLC, Jamie M. Bennett of Ashcraft & Gerel, Stephen J. Del Sole and Patrick K. Cavanaugh of Del Sole Cavanaugh Stroyd LLC, and Gregory M. Simpson of the Simpson Law Firm.

UPMC is represented by Jonathan L. Diesenhaus, Mitchell J. Lazris and Stephen A. Loney of Hogan Lovells.

The case is United States of America et al. v. UPMC et al., case number 2:12-cv-00145, in the U.S. District Court for the Western District of Pennsylvania.

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