HOUSTON – United Memorial Medical Center has agreed to pay $2 million and to make additional contingent payments to resolve alleged False Claims Act violations, the United States Department of Justice announced Wednesday.
UMMC, who is represented by John Kelly, Jackie Papish and AJ Bolan of Barnes & Thornburg LLP, formerly operated hospitals in the Houston area. They allegedly claimed excessive cost outlier payments from government health care programs and double-billed the government for COVID-19 tests that were also billed either to the state or the City of Houston. The settlement resolves a lawsuit originally brought by Ryan Griffin, a former employee of UMMC, under what the DOJ called the “qui tam provisions” of the False Claims Act. Under the settlement, Griffin will receive $300,000.
Recommended Videos
“This over $2 million settlement is significant,” said U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas (SDTX). “We depend upon medical providers to be good stewards of a community’s healthcare services and of the federally funded programs that pay for those services. The case alleges UMMC made millions by overbilling those health care programs and intentionally double billing for COVID-19 testing. Instead of returning those monies to America’s taxpayers, they allegedly pocketed the money for themselves. Finding the wrongdoing and lost monies in these types of cases involves complexities akin to playing three-dimensional chess, but know this, the SDTX will not stop in its quest for justice until it can claim checkmate.”
According to the agreement between UMMC and the United States, the settlement funds will be paid by one of UMMC’s principals, Ravishanker Mallapuram, and UMMC has guaranteed the payment of those funds.
“Hospitals and other providers who participate in federal health care programs have an obligation to the taxpayers to ensure that they are billing appropriately,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Department of Justice’s Civil Division. “We will hold accountable those who knowingly overbill or double bill for the medical services they provide to federal beneficiaries.”
In addition to its standard payment system, Medicare and Tricare provide supplemental reimbursement to hospitals called “cost outlier” payments in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payment system to ensure that hospitals have the incentive to treat inpatients whose care requires high costs. According to the DOJ, this settlement resolves allegations that UMMC submitted claims for cost outlier payments by rapidly increasing its charges for inpatient care and underreporting its charges on Medicare cost reports, “thereby preventing the government health care programs from adjusting those charges so that they would reasonably reflect UMMC’s actual costs,” a news release explained.
The settlement also resolves allegations that UMMC concealed and improperly avoided its obligation to reimburse the federal health care programs for any excessive outlier payments its hospitals received.
UMMC agreed to settle allegations that it submitted claims to the Health Resources and Services Administration’s Uninsured Program for COVID-19 testing services, despite being reimbursed for those same services by either Texas or Houston.
“Hospitals and executives who run them should prioritize accurate, lawful billing of Medicare and other taxpayer-funded health care programs at all times,” said Special Agent in Charge Jason E. Meadows of the Department of Health and Human Services - Office of Inspector General (HHS-OIG). “This practice is especially imperative, however, when the world is responding to a public health crisis. At HHS-OIG, it is our fundamental responsibility to, along with our law enforcement partners, safeguard federally funded health care programs and American taxpayer monies.”
The False Claims Act permits private citizens who are aware of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery.