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DOJ cracks down on health system performing outpatient surgeries as inpatient; Banner Health to pay $18M+ settlement: 5 things to know

The DOJ is targeting hospitals and health systems for performing outpatient procedures in the inpatient setting, where they can charge a higher rate.

Phoenix-based Banner Health, a 28-hospital system, agreed to pay more than $18 million to resolve allegations 12 hospitals admitted patients for procedures who could have gone to the less-costly outpatient setting. Here are five things to know.

1. Between Nov. 1, 2007, and Dec. 31, 2016, the 12 Banner Health hospitals billed Medicare for short-stay inpatient procedures that could have been performed and billed on an outpatient basis. The settlement resolves allegations the health system knowingly overcharged Medicare unnecessarily and inflated the number of hours patients received outpatient observation in reports to Medicare.

2. Among the 12 hospitals accused of submitting false claims are Banner Health's locations in Arizona and Colorado.

3. In addition to the settlement, Banner Health entered into a corporate integrity agreement with HHS to engage in significant compliance efforts over the next five years. The health system is required to retain an independent review organization to review the accuracy of claims for federal healthcare program beneficiaries.

4. The qui tam lawsuit was filed by a former Banner Health employee, Cecilia Guardiola, who under the whistleblower provisions of the False Claims Act, will receive around $3.3 million.

5. Acting Assistant Attorney General Chad A. Readler for the Justice Department's Civil Division said, "Taxpayers should not bear the burden of inpatient services that patients do not need. The Department will continue its efforts to stop abuses of the nation's healthcare resources and to ensure that patients receive the most appropriate care."

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