Univ. of Colorado Hospital Settles Medicare, Medicaid and TRICARE Liability

March 18, 2005

Acting United States Attorney Bill Leone and Colorado Attorney General John Suthers announced that the United States and the State of Colorado have agreed to settle several claims that University of Colorado Hospital improperly billed the Medicare and Medicaid programs and the TRICARE program.

TRICARE is the managed health care program established by the Department of Defense to provide health care to members of the uniformed services and their dependents. Under the terms of the agreement the University of Colorado Hospital has agreed to pay $755,272 to compensate the Medicare, Medicaid, and TRICARE programs.

The settlement agreement compensates the Medicare, Medicaid and TRICARE programs for claims for services for certain “short stay” patients as inpatient admission rather than outpatient observation. Between June 30, 1996, and June 30, 1999, University of Colorado Hospital improperly billed Medicare, Medicaid and TRICARE for inpatient admission and treatment using diagnostic codes for certain “short stay” patients who stayed in the hospital for 28 hours or less and for whom it was determined the University of Colorado Hospital should have claimed using the less expensive outpatient observation claims codes.

This case was initially opened as False Claims Act investigation based on the November 1999 voluntary disclosure by the University of Colorado Hospital that it had billed the Medicare program inappropriately. Several years after the investigation was started, University of Colorado Hospital substantially revised its original estimates of the amount of invalid billing from approximately $6 to $9 million, to under $1 million due to errors in its original audit and damage calculations.

The Hospital cooperated with the federal and State investigation which ultimately determined that the improper billings were not submitted intentionally or fraudulently by University of Colorado Hospital, but were the result of negligence. In addition, it was determined that the original voluntary disclosure was incorrect and that the revised audit damage figures provided by the Hospital were substantially correct.

Leone stated, “Complex health care investigations require in depth analysis and the ability to keep an open mind. In this case University of Colorado Hospital cooperated with the investigation and, although it clearly submitted inappropriate claims to the Medicare, Medicaid and TRICARE programs, we were able to determine that this was not the proper subject of a False Claims Act suit.

“As a result, University of Colorado Hospital is not being required to pay the treble damages which would have been authorized under the False Claims Act. University of Colorado Hospital is to be commended for its cooperation with the investigation and its voluntary disclosure of additional problems which were not the original subject of the investigation.”

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