Simi Valley Hospital Settles Medicare Fraud Case for $5.1M

John Commins, for HealthLeaders Media , November 5, 2010

Simi Valley Hospital in Los Angeles has paid the federal government $5.15 million to resolve whistleblower allegations that the hospital filed false claims with Medicare over a six-year period.

The lawsuit, which was originally filed by a former employee at the hospital, alleged that its Behavioral Medicine Services unit knowingly submitted false claims to Medicare for chemical dependency and psychiatric patient services performed between 1991 and 1997.

Simi Valley Hospital paid the settlement last week but admitted no wrongdoing.

The Department of Justice intervened and negotiated the settlement, and a federal judge in Los Angeles dismissed the lawsuit Wednesday after being told the settlement was finalized last month.

The lawsuit was originally filed in October 2001 by Timothy Field, the former program director and then the administrative director for Simi Valley Hospital's Behavioral Medicine Services unit.

Field's lawsuit alleged that Simi Valley Hospital improperly billed Medicare and Medi-Cal for:

  • psychiatric care, even though the patients were receiving chemical dependency detoxification services;
  • psychiatric overnight stays and inpatient services, even though the patients did not meet the criteria for inpatient hospitalization; and
  • paying a medical director $12,000 per month to establish, and to get patients admitted into, a non-existent program for women dealing with post-traumatic stress disorder.

A statement released by the hospital Thursday, said, in part: "The government's allegations did not relate to the quality of patient care provided—the matter is strictly billing-related. We believe that our hospital follows fair and accurate billing practices, and are settling to avoid the expense and inconvenience of lengthy litigation."

John Commins is a senior editor with HealthLeaders Media.

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