San Mateo hospital, county will pay $11.4 million to settle federal false-claim allegations
San Mateo County and the San Mateo County Medical Center have agreed to pay some $11.4 million after federal authorities alleged the two entities were submitting Medicare claims for inpatient services that are not covered.
The settlement was announced in a news release Friday from the U.S. Attorney’s Office for the Northern District of California. The allegations originally came from a former employee of the medical center, who filed a claim under whistleblower provisions of the False Claims Act.
Authorities had alleged that from the beginning of 2013 through early 2017, the medical center, which is publicly owned, had admitted patients for whom hospitalization was “not medically reasonable or necessary,” according to the release. Some patients were allegedly admitted “for reasons other than medical status, including social reasons and lack of available alternative placements.”
The medical center then allegedly billed the federal Medicare program for reimbursement, even though, federal authorities said, officials in San Mateo were aware that the costs were not reimbursable.
In a statement, the medical center’s CEO, Dr. Chester J. Kunnappilly, said that the hospital had first received notice of concerns over Medicare in billing in 2016. Officials began an investigation and engaged outside experts to review billing practices, and fully cooperated when a federal investigation was launched soon after.
“As a safety net institution, San Mateo Medical Center must at times admit patients to the hospital who cannot be safely discharged to home,” often elderly patients or those with disabilities who need additional home care, Kunnappilly said in the statement. He said that at times, the medical center had admitted such patients even when medical necessity didn’t require it — an action that is often appropriate and not always a compliance issue, but that “there were instances when our systems failed to ensure that these types of stays were appropriately billed consistently.
“We believe that this lengthy and in-depth investigation has revealed that SMMC has always made a good faith effort to bill these hospitalizations compliantly,” Kunnappilly said.
As part of the settlement, the medical center entered into a five-year agreement to submit to independent reviews of its inpatient admissions when they are submitted for federal reimbursement. The settlement does not include any determination of liability.
Federal authorities earlier this week sued health-care giant Kaiser Permanente, alleging the Northern California organization had committed Medicare fraud and pressured doctors to list incorrect diagnoses in order to get higher reimbursements.