Southern Tennessee Medical Center, LLC to Pay $2.48 Million to Settle False Claims Act and Overpayment Allegations

Southern Tennessee Medical Center, (STMC) located in Winchester, Tenn., has agreed to pay the United States $2,481,856.50 to settle False Claims Act and overpayment allegations, announced Jack Smith, Acting U.S. Attorney for the Middle District of Tennessee. In December 2015 STMC submitted a voluntary self-disclosure to the U.S. Attorney’s Office and to the Office of Inspector General for the Department of Health and Human Services.  An investigation by the company’s compliance program into STMC’s billing for in-patient geriatric psychiatric services prompted the self-disclosure. 

Based upon an extensive investigation conducted by STMC, the United States alleged that STMC submitted certain claims and received payment for: (1) medically unnecessary days of in-patient geriatric psychiatric services and (2) in-patient geriatric psychiatric services for which a Physician Certification or Recertification was not obtained.  The time period covered by the settlement agreement spans January 1, 2009 through December 31, 2014. 

“When medical providers self-disclose potential violations directly to the U.S. Attorney’s Office they avoid the costs associated with protracted investigations and minimize the risks of   costly fines and exclusion under the False Claims Act,” said Acting U.S. Attorney Jack Smith, for the administration of this settlement.   “When potential violations were discovered by this provider’s compliance program, they responded appropriately, avoided harsher penalties and resolved the issue quickly.”

Under the settlement agreement, STMC will pay $1,628,098.50 to resolve the United States’ allegations that it submitted false claims to Medicare primarily during the period from January 2009 to December 2014 for medically unnecessary in-patient geriatric psychiatric services.  STMC will also pay $853,758.00 to resolve overpayment allegations relating to the billing of in-patient geriatric psychiatric services for which a Physician Certification or Recertification was not obtained.  

"We welcome self-disclosures from the health care community," said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services Office of Inspector General in Atlanta. "Working together we can help safeguard taxpayer dollars and strengthen the financial position of the Medicare Trust Fund."

The United States encourages all healthcare providers to self-disclose any known violations that have resulted in the submission of improper claims to federal healthcare programs.  This case was investigated by the United States’ Attorney’s Office for the Middle District of Tennessee and the U.S. Department of Health & Human Services Office of Inspector General.  Assistant U.S. Attorney Jason Ehrlinspiel represented the United States.