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Indiana hospitals settle Medicare lawsuit

September 30, 2009

Six hospital systems—three in Indiana and three in Alabama—have agreed to pay the federal government $8.3 million to settle a whistleblower lawsuit alleging the hospitals deliberately overcharged Medicare for routine back surgeries.

The three systems in Indiana, including two in the Indianapolis area, accounted for $6 million of the settlement.

St. Francis Hospital in Beech Grove will pay the most, $3.1 million. Deaconess Hospital in Evansville will pay $2.1 million and St. John’s Hospital in Anderson will pay $826,256.

The lawsuit alleged that, from 2000 to 2008, patients admitted to the hospitals for a type of spinal surgery known as kyphoplasty were unnecessarily kept overnight and then classified as inpatient cases to boost hospital revenue.

The six hospitals make up the second group to settle charges stemming from the lawsuit. In April, three hospitals in the St. Paul, Minn., area paid the federal government a total of nearly $2.3 million to settle the case.

The lawsuits against the hospitals were filed in a federal court in Buffalo, N.Y.
 

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