Carolinas HealthCare to pay $6.5 million for fraudulent billing practices

Updated: Jun. 30, 2017 at 6:13 PM EDT
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CHARLOTTE, NC (WBTV) - Carolinas HealthCare has agreed to pay millions of dollars to settle a whistleblower lawsuit in which state and federal prosecutors also agreed to take part.

The lawsuit was filed by Mark McGuire, who is the laboratory director of operations at the Carolinas Medical Center in Charlotte, according to the legal complaint. McGuire's complaint alleges the hospital system was over-billing the federal government for urine screening tests.

McGuire spent months trying to alert supervisors and hospital staff about the billing error to no avail, according to the complaint.

According to court documents, from 2011 to 2015, CHS conducted urine drug tests, categorized as "moderate complexity" tests by the Food and Drug Administration (FDA), but submitted claims that indicated the company had conducted "high complexity" tests.  Claims submitted to federal health care programs include a code that identifies the services provided and that triggers a certain payment.

The government says federal health care programs paid CHS, and certain facilities under contract with CHS, approximately $80 more per test for the claims submitted with the higher paying code.

DOCUMENT: Click here to read the full complaint

Both the United States Department of Justice and the North Carolina Attorney General's Office joined McGuire's suit.

On Friday, paperwork was filed to settle the case for $6.5 million.

"Medical service providers must respect public resources in government health care programs," said U.S. Attorney Rose.  "As more Americans struggle with healthcare costs, we must ensure that our programs are efficient and compliant.  For those medical providers who seek to unlawfully and unfairly take advantage of government health care programs, this case resolution should serve as fair warning."

"When health care companies try to boost their profits by billing federal health care programs for more expensive services than they actually provided, the Office of Inspector General will ensure they are held accountable for their deceptive schemes," said Special Agent in Charge Jackson.

McGuire will receive $1,365,000 from the settlement.

CHS released a statement about the incident Friday evening:

On June 30, 2017, Carolinas HealthCare System entered a civil settlement to resolve allegations in a lawsuit that, between 2011 and 2015 CHS billed the wrong code for drug screens reimbursed by Medicare and Medicaid. The lawsuit is not about our patient safety, quality of care, or whether the urine drug screen tests were done correctly. It is about the interpretation and application of complex and constantly changing billing guidelines.

In 2010, the Centers for Medicare and Medicaid Services (CMS) rejected the long standard American Medical Association's CPT billing codes for drug screens in favor of its own coding system. In 2013 and 2014, CHS asked two separate outside consultants toreview our coding process. Both confirmed our coding selection. Carolinas HealthCare System takes compliance with Medicare and Medicaid regulations very seriously and our Corporate Compliance Department is dedicated to facility and physician compliance.

CHS takes the concerns of our employees very seriously. In fact, our anonymous HelpLine, which was implemented in 1999, was set up for the exact purpose of encouraging teammates to voice concerns should they arise.

CHS has fully cooperated in the Government's review of this matter, but after almost two years we determined it was in our best interest to move forward and resolve this issue. The $6.5 million amount that CHS is paying to resolve this matter accounts,in part, for the difference between what CHS was reimbursed for the drug screens, and what Medicare and Medicaid alleges that CHS should have been reimbursed had it used a different code. We are pleased to put this matter behind us so that we can continue focusingon providing the expert level of care that our patients and community demand and deserve.

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