NFRMC among hospitals paying $34 million in Medicare fraud probe

Published: Tuesday, July 2, 2013 at 6:45 p.m.
Last Modified: Tuesday, July 2, 2013 at 6:45 p.m.

North Florida Regional Medical Center is one of several hospitals owned by the Hospital Corporation of America that is paying the U.S. government more than $7 million to settle allegations of fraudulent Medicare claims for a spinal procedure.

The U.S. Department of Justice announced in a news release Tuesday that 55 hospitals in 21 states have agreed to pay the U.S. more than $34 million in settlements for false claims to Medicare for kyphoplasty procedures, a procedure used to treat spinal fractures often caused by osteoporosis. Twenty-three HCA hospitals are among the hospitals that are paying settlements.

“In this case, what hospitals were doing was admitting patients and keeping them overnight to receive a much larger payment from the U.S. government,” said Matthew Smith, one of the lawyers with Phillips & Cohen LLP in Washington, D.C., that was involved in the whistleblowing effort that exposed the hospitals.

“Kyphoplasty was traditionally an outpatient procedure and doesn't necessitate an inpatient level of care,” Smith added.

But sales representatives from Kyphon, the original makers of the materials used in the procedure — orthopedic balloons and bone cement — encouraged hospitals to keep patients overnight in order to bill kyphoplasty as an inpatient procedure to make more money, Smith continued.

He added that hospitals made between $6,000 and $12,000 per procedure depending on how they billed it.

“Not all the hospitals that were approached went along with it. Some hospitals complained to the company about sales reps,” Smith said, adding that hospitals “would be hard pressed to say that they had to do (kyphoplasty) on an inpatient basis.”

Kyphoplasty is considered a minimally invasive procedure that uses a balloon to raise the fractured bone into its correct position, and then injects cement, which acts like a cast over the fracture.

Kyphon, which was acquired by Medtronic in 2007, paid the U.S. government $75 million in settlements, Smith said. Another $75 million is coming from the more than 100 hospitals that reached settlements with the government, including the HCA hospitals and others announced Tuesday, according to the Department of Justice news release.

In the release, Tom O'Donnell, special agent in charge in the New York regional office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), said the settlements “represent one of the largest and most successful multi-party health care investigations in the nation.”

HCA has 23 hospitals that will pay settlements totaling approximately $7.15 million.

Regarding the settlements, HCA spokesman Ed Fishbough said, “We are pleased to see new clarification of industry care standards, which help physicians make decisions regarding kyphoplasty patients, and we are confident as a result that this issue has been resolved.”

Officials at North Florida Regional Medical Center declined comment.

Contact Kristine Crane at 338-3119, or

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