Massachusetts Hospital Will Pay $2.8M to Settle Rehab Case

Joe Cantlupe, for HealthLeaders Media , February 19, 2010

Mercy Medical Center in Springfield, MA, agreed to pay almost $2.8 million to settle claims it failed to document, or failed to provide the minimum number of hours of rehabilitation therapy between 2005 and 2006, which are required under Medicare guidelines, the Justice Department said today.

Medicare rules require that inpatient hospitals must provide a minimum number of rehabilitative therapy for their patients. Justice officials said the settlement resulted from a disclosure made by Mercy Hospital to the Department of Health and Human Services Office of Inspector General that it could not demonstrate that it had provided the required level of therapy.

"This settlement demonstrates the Justice Department's commitment to ensuring that Medicare patients get all of the care that Medicare pays for," Tony West, assistant attorney general for the Justice Department's civil division, said in a prepared statement. "As this settlement shows, those who come forward to disclose their violations and cooperate with the government will be dealt with fairly."

Justice Department officials said the settlement "is part of the government's emphasis on combating healthcare fraud."

The department used the False Claims Act in negotiating its case. Using the False Claim Act, the Justice Department has recovered $2.2 billion since January 2009 in cases involving fraud against federal healthcare programs, according to the department.

Mercy Medical Center says it has worked to fix documentation problems related to its rehabilitation program that cost the hospital $2.8 million in fines.

There was "misinterpretation and misunderstanding of the documentation," says Mark Fulco, senior vice-president for strategy and marketing for the Sisters of Providence Health System, which operates the hospital.

"We self-reported the problems," Fulco says. "The services were provided, but some of the documentation was not maintained at the level it should have been."

"Once we identified the problem, we took immediate steps to notify the government and [carry out] the policies," Fulco says. "We're confident all the current documentation meets the requirements."

The hospital has a five-year plan to pay the fines, Fulco says.

Fulco adds that the hospital's actions that led to the settlement could be a lesson to other healthcare facilities facing similar issues. To avoid higher penalties, Mercy Medical Center immediately came forward when it saw problems with the documentation. By reporting the problem to the Justice Department and taking steps to fix the problems, the hospital avoided larger penalties, Fulco says.

Still, the government fine was larger than expected, he says.

"We want to do the right thing—we feel a strong compliance program is the best cure," Fulco says. "This could have been a deal breaker. We feel our compliance program is aligned with our values."

"It's always better to take the high road," he says.

Joe Cantlupe is a senior editor with HealthLeaders Media Online.

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