Trover Health System Of Madisonville, Kentucky Pays $1,162,837 To Settle False Claims Allegations

LOUISVILLE, Ky. – Trover Health System of Madisonville, Kentucky has voluntarily entered into a settlement with the United States of America to pay $1,162,837.00 to settle allegations that it submitted false claims in violation of the Federal False Claims Act, announced the Office of Inspector General of the Department of Health and Human Services and David J. Hale, United States Attorney for the Western District of Kentucky. Fifty-five hospitals located throughout twenty-one states are part of today’s announcement by the Justice Department that have agreed to pay the United States a total of more than $34 million to settle allegations that the health care facilities submitted false claims to Medicare for kyphoplasty procedures.

“Pursuing health care fraud is a priority of my Office and the Department of Justice. We will continue to work with the Department of Health and Human Services to ensure that medical providers who overbill Medicare are investigated and held to account,” stated David J. Hale, United States Attorney for the Western District of Kentucky.

According to the settlement agreement, the United States contends that Trover Foundation Clinic, Inc., d/b/a Trover Health System, submitted Diagnosis-related Group (DRG) claims to Medicare for certain kyphoplasty procedures performed between May 1, 2001, and July 31, 2009, as inpatient procedures when, in fact, they should have been billed as outpatient procedures. Kyphoplasty is a minimally-invasive surgery used to treat compression fractures of the spine. The device kits used in the procedure are manufactured and marketed by Medtronic Spine LLC, formerly known as Kyphon, Inc. In most cases, the procedure is done on an elective basis and requires only two hours of observation following surgery, and hence can often be done on an outpatient basis. However, Trover Health Systems often incorrectly billed these procedures to Medicare as an inpatient level of service, which reimbursed at a higher rate.

Relators Charles Bates and Craig Patrick filed a qui tam action on May 29, 2008, in the United States District Court for the Western District of New York. They will receive $203,496 of the settlement proceeds.

This agreement is neither an admission of liability by Trover Health System nor a concession by the United States that its claims are not well-founded.

This investigation was handled by Assistant United States Attorney Benjamin S. Schecter along with the United States Attorney’s Office for the Western District of New York and the Commercial Litigation Branch for the Department of Justice.