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Sutter Health settles Medicare false claims civil case for $90M

Suit includes resolution of whistleblower action by former employee of Palo Alto Medical Foundation

Sutter Health, which includes the Palo Alto Medical Foundation, settled a federal lawsuit alleging the health care provider of violating the False Claims Act. The agreement was filed on Aug. 30, 2021. Embarcadero Media file photo by Veronica Weber.

Sutter Health has agreed to pay $90 million to settle a civil lawsuit that alleged the company had overcharged a federal Medicare program.

The agreement was filed Monday in federal court in San Francisco by Sacramento-based Sutter Health and several of its affiliates, including Sutter Bay Medical Foundation (which conducts business as the Palo Alto Medical Foundation) and Sutter Valley Medical Foundation, to settle allegations that the medical care services provider violated the False Claims Act by knowingly submitting inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans.

The government alleged in 2015 that Sutter Health knowingly submitted unsupported diagnosis codes for certain patient encounters for beneficiaries under its care, inflating payments to be made to the plans and to Sutter Health. The lawsuit further alleged that, once Sutter Health became aware of the situation, it failed to correct it.

The suit includes resolution of a whistleblower action in 2013 by a former employee of Palo Alto Medical Foundation.

"Today's settlement exemplifies our commitment to fighting fraud in the Medicare program," said Stephanie Hinds, acting U.S. Attorney for the Northern District of California. "Health care providers who flout the law need to know that my office will hold accountable those who pad their bottom line at taxpayer expense."

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The government relies on health care providers to submit accurate information, said Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department's Civil Division.

"Today's result sends a clear message that we will hold health care providers responsible if they knowingly provide or fail to correct information that is untruthful," she said.

In connection with the settlement, Sutter Health entered into an agreement with the federal agencies that requires it to hire an independent reviewer to review a sample of the company's medical billing records.

Sutter Health officials said in a statement that the settlement and agreement, in which the company admitted no liability, "bring closure to a long-running dispute, allowing Sutter to avoid the uncertainty and further expense of protracted litigation, and enabling a constructive relationship with the government."

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Sutter Health settles Medicare false claims civil case for $90M

Suit includes resolution of whistleblower action by former employee of Palo Alto Medical Foundation

by /

Uploaded: Fri, Sep 3, 2021, 11:44 am
Updated: Tue, Sep 7, 2021, 8:57 am

Sutter Health has agreed to pay $90 million to settle a civil lawsuit that alleged the company had overcharged a federal Medicare program.

The agreement was filed Monday in federal court in San Francisco by Sacramento-based Sutter Health and several of its affiliates, including Sutter Bay Medical Foundation (which conducts business as the Palo Alto Medical Foundation) and Sutter Valley Medical Foundation, to settle allegations that the medical care services provider violated the False Claims Act by knowingly submitting inaccurate information about the health status of beneficiaries enrolled in Medicare Advantage Plans.

The government alleged in 2015 that Sutter Health knowingly submitted unsupported diagnosis codes for certain patient encounters for beneficiaries under its care, inflating payments to be made to the plans and to Sutter Health. The lawsuit further alleged that, once Sutter Health became aware of the situation, it failed to correct it.

The suit includes resolution of a whistleblower action in 2013 by a former employee of Palo Alto Medical Foundation.

"Today's settlement exemplifies our commitment to fighting fraud in the Medicare program," said Stephanie Hinds, acting U.S. Attorney for the Northern District of California. "Health care providers who flout the law need to know that my office will hold accountable those who pad their bottom line at taxpayer expense."

The government relies on health care providers to submit accurate information, said Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department's Civil Division.

"Today's result sends a clear message that we will hold health care providers responsible if they knowingly provide or fail to correct information that is untruthful," she said.

In connection with the settlement, Sutter Health entered into an agreement with the federal agencies that requires it to hire an independent reviewer to review a sample of the company's medical billing records.

Sutter Health officials said in a statement that the settlement and agreement, in which the company admitted no liability, "bring closure to a long-running dispute, allowing Sutter to avoid the uncertainty and further expense of protracted litigation, and enabling a constructive relationship with the government."

Comments

Neal
Registered user
Community Center
on Sep 3, 2021 at 5:05 pm
Neal, Community Center
Registered user
on Sep 3, 2021 at 5:05 pm

No surprise here. I have been over billed on several occasions. I was once billed for three colonoscopies. They not only bill for procedures that weren't performed, they do what is called up coding. For example, if you had a short visit with your doctor they bill the insurance for a long visit which "justifies" a larger fee. Check your bills carefully for the correct service rendered and what they bill your insurance for. They used to include a medical procedure code number on the bill. You could Google the code number and find out precisely what you were billed for. They no longer put the code number on the bill in an attempt to conceal the truth.


Online Name
Registered user
Embarcadero Oaks/Leland
on Sep 3, 2021 at 6:18 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Sep 3, 2021 at 6:18 pm

PAMF recently billed me for a "long" visit that's always been covered "because we'd "discussed too many topics" -- the same ones we always cover. I paid but questioned both PAMF billing and my doctor and got nowhere. Thinking my insurance might be screwed up I had my insurance folks check; insurance was fine and they got same "explanation."

A few months later I get a refund notice with no explanation, followed 15 minutes later with a "We miss you. Come see us" email.

My unexplained refund probably stems from the case.


Michelle
Registered user
Stanford
on Sep 3, 2021 at 6:52 pm
Michelle, Stanford
Registered user
on Sep 3, 2021 at 6:52 pm

Not surprise at all.
I have to check all my charges with them, and in most cases they over charged. Hundred of dollars a year.


community member
Registered user
University South
on Sep 4, 2021 at 12:52 pm
community member, University South
Registered user
on Sep 4, 2021 at 12:52 pm

So they overcharge patients and they also submit inaccurate information to Medicare.
They paid a 90 MILLION dollar fine on August 30, for KNOWINGLY overcharging Medicare, violating the False Claims Act. In SF federal court.

Sounds like a criminal organization, not a health organization.


Name hidden
Downtown North

Registered user
on Sep 4, 2021 at 6:36 pm
Name hidden, Downtown North

Registered user
on Sep 4, 2021 at 6:36 pm

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


community member
Registered user
University South
on Sep 5, 2021 at 1:53 pm
community member, University South
Registered user
on Sep 5, 2021 at 1:53 pm

I'll be interested to see their PR response to the charges and the fine.
If any.


Online Name
Registered user
Embarcadero Oaks/Leland
on Sep 6, 2021 at 8:09 am
Online Name, Embarcadero Oaks/Leland
Registered user
on Sep 6, 2021 at 8:09 am

Community member, Sutter's statement from the last paragraph in this article:

Sutter Health officials said in a statement that the settlement and agreement, in which the company admitted no liability, "bring closure to a long-running dispute, allowing Sutter to avoid the uncertainty and further expense of protracted litigation, and enabling a constructive relationship with the government."


Tyler Cannon
Registered user
Duveneck/St. Francis
on Sep 6, 2021 at 8:50 am
Tyler Cannon, Duveneck/St. Francis
Registered user
on Sep 6, 2021 at 8:50 am

>> "Sutter Health officials said in a statement that the settlement and agreement, in which the company admitted no liability, "bring closure to a long-running dispute, allowing Sutter to avoid the uncertainty and further expense of protracted litigation, and enabling a constructive relationship with the government."

^ Meaning: An out of court settlement agreement signifying a done deal, no further explanations required, or any admission of guilt on the part of Sutter Health.

Increases in premiums and reduced health services will help to cover the $90M outlay.


community member
Registered user
University South
on Sep 6, 2021 at 8:51 pm
community member, University South
Registered user
on Sep 6, 2021 at 8:51 pm

That may be a legal statement for other lawyers, but I believe much more is required.

Like a promise to stop overcharging patients; and
a promise to stop inflating patient diagnoses in order to overcharge Medicare.

Publicize changes in staff and management and Board who oversaw the cheating and approved it.
Their statement just says it wants to stop "protracted litigation." Stop the cheating first, Sutter.


Consider Your Options.
Registered user
Another Palo Alto neighborhood
on Sep 7, 2021 at 12:01 pm
Consider Your Options. , Another Palo Alto neighborhood
Registered user
on Sep 7, 2021 at 12:01 pm

I can't stand Sutter Health. I badly miss the Palo Alto Medical Foundation of former years. Dealing with Sutter Health is an administrative nightmare. Their frontline workers--doctors, nurses, desk workers are fine (though much harder to access these days), but the organization's systems are designed to milk customers and insurance companies for fees. Now it appears they are dishonest, too. A vampire corporation should not be allowed to manage people's health care.

Heads should be rolling at the top. Hello, Sutter Health Board of Directors, are you listening? You just learned a very expensive lesson. It might actually be more profitable to treat people honestly and fairly. That would also help you hold on to and attract patients and excellent care providers.


cheese guy
Registered user
Palo Verde
on Sep 8, 2021 at 9:46 pm
cheese guy, Palo Verde
Registered user
on Sep 8, 2021 at 9:46 pm

I just got a notice from Medicare that they denied a $500 charge that Sutter Health/PAMF tried to bill to Medicare Part B. What's the problem? I am not covered by Medicare Part B (only A, since I am fully employed and have good private insurance), but Sutter Health submitted a bill anyhow. Things like this seem to happen all the time with these weasels.


community member
Registered user
University South
on Sep 13, 2021 at 4:25 pm
community member, University South
Registered user
on Sep 13, 2021 at 4:25 pm

I had a very simple message for my doctor. Spent over 1/2 hour on the web and could not find a way to write an email.
Finally called his office and waited 15 minutes till a nurse(?) answered.
She was polite and understood my message easily. whew.


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