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Medical supplier Hill-Rom makes $42M fraud settlement

September 27, 2011

Hill-Rom Holdings Inc., a medical-equipment company based in Indiana, agreed Tuesday to pay nearly $42 million to settle a government lawsuit that alleged Medicare fraud.

The government had accused the company of knowingly submitting false claims to Medicare from 1999 to 2007 for bed support surfaces meant to treat pressure ulcers and bedsores. According to the charges, Hill-Rom asked "numerous and repeated" times for payment from Medicare for patients who no longer qualified for it, including patients who had died or were no longer using the equipment.

According to the charges, Hill-Rom would automatically bill Medicare for "long periods of time," "without making any reasonable effort to determine if the patients for whom it submitted the claims continued to meet Medicare conditions for payment."

Hill-Rom denied wrongdoing.

"Hill-Rom is dedicated to the highest standards of business conduct and integrity," the company said in a statement. "We vigorously disagree that there was any wrongdoing in this situation and this settlement does not represent any admission on our part."

The investigation into Hill-Rom's Medicare billing practices by the U.S. attorney's office in Knoxville, Tenn., began as a result of allegations brought by two Hill-Rom employees.

Laurie Salmons and Lisa Brocco, both trained nurses who  were sales representatives for Hill-Rom, filed an action on behalf of the United States under the whistle-blowe provisions of the federal False Claims Act.

Under the terms of the settlement agreement, Salmons and Brocco will get more than $8 million from the proceeds of the settlement for filing the complaint and assisting with the investigation.

Hill-Rom shares rose 3.6 percent on Tuesday, to $31.29 each, as investors reacted favorably to the finalization of the settlement.

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