A hospital in Eastern Kentucky has settled a whistle-blower lawsuit with the federal government alleging that it improperly billed Medicare for work done in a pain management clinic.
U.S. District Judge David Bunning on Thursday unsealed a lawsuit brought by Dr. Michael Fletcher on behalf of the United States government against Pikeville Medical Center.
Fletcher, who worked as the director of the pain management clinic at the hospital from May 2005 through July 2007, accused the hospital of overbilling Medicare in the pain management, radiation oncology and medical oncology units.
Kyle Edelen, a spokesman for the U.S. Attorney's Office in Lexington, said the hospital paid $36,138, with Fletcher receiving $7,228 for bringing the allegations to the government. The hospital did not admit wrongdoing as part of the agreement.
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Pam May, general counsel for the hospital, on Thursday described the dispute as "an overbilling situation."
May said an outside expert reviewed billing at the hospital's pain clinic and discovered some overpayments to the hospital, as well as underpayments by the hospital to the federal government. Once the auditors were done, it was determined that the hospital owed about $36,000 to the government, May said.
"This was not a false claim action," May said. "This was not a criminal action, not an action that involved any penalties."
Fletcher's attorney, Nicholas Bunch of Cincinnati, did not immediately return a message seeking comment.
Fletcher, whose medical license shows a practice in Crestview Hills in northern Kentucky, said in the lawsuit that a pain management practice consultant reviewed the facility's practices in March and April 2007. Fletcher said the consultant, Linda Van Horn of Kansas City, Mo., found that the hospital's Leonard Lawson Cancer Center overbilled Medicare $300,000 during the time she examined the facility's operations.
The hospital used improper billing codes for the pain management clinic, which indicated services were provided in a private physician's office, rather than the clinic, Fletcher said. Fletcher said similar practices were used in the radiation oncology and medical oncology units.
Fletcher said he met with Walter May, the hospital's CEO, and later, Jerry Johnson, the facility's COO, about the billing issue. Johnson dismissed the billing issue as "no big deal" and said it would be "taken care of," Fletcher said.
Fletcher alleged that the hospital took no steps toward fixing the problem. May said the issues raised, which involved the use of codes that periodically change, were dealt with in 2007.
Fletcher brought the suit under the federal False Claims Act, which allows whistle blowers to sue entities receiving federal funding over alleged wrongdoing. The government may seek to collect penalties of between $5,500 and $11,000 for each violation proven. In turn, a whistle blower may be awarded a portion of any judgment or settlement.