Banner Health To Pay $18 Million Over False Claim Allegations

Published: Thursday, April 12, 2018 - 1:40pm

Banner Health has agreed to a multimillion-dollar settlement with the U.S. Justice Department over allegations that it submitted false claims to Medicare.

The $18 million settlement resolves allegations that 12 Banner hospitals in Arizona and Colorado knowingly overcharged Medicare patients unnecessarily. Over a nine-year period, the Justice Department alleged Banner billed Medicare for short-stay inpatient procedures that should have billed on a cheaper, outpatient basis. It’s also alleged Banner inflated the number of hours some Medicare patients received outpatient observation care.

In a statement, Christian J. Schrank, special agent in charge for the Office of Inspector General of the U.S. Department of Health and Human Services, said, “Hospitals that bill Medicare for more expensive services than necessary will be held accountable. Medical decisions should be made based on patients’ conditions and needs, not on providers’ profits.”

Banner Health provided the following statement:

"Banner Health is fully committed to adhering to all legal and regulatory requirements and providing patients with the highest quality of care. Although the rules that dictate when a hospital can accommodate a physician’s request to admit a Medicare patient are complex and evolving, our policy has always been to make those decisions in accordance with government guidelines. The settlement does not involve any finding of wrongdoing on Banner’s part, and we are pleased to resolve this matter to avoid the disruption and expense of ongoing litigation."

The settlement also resolves a lawsuit filed by Cecilia Guardiola, a former Banner Health employee, under the whistleblower provisions of the False Claims Act. The Justice Department says she will receive roughly $3.3 million.

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