Billing fraud case settled Nursing care center to pay $827,000 to federal government; Medicare charges questioned; Levindale attributes its problem to 'honest mistake'


A Northwest Baltimore nursing care center has agreed to pay $827,000 to the federal government to settle allegations that it improperly billed Medicare numerous times for room and board charges not covered by the program.

Levindale Hebrew Geriatric Center and Hospital Inc. had been the target of an investigation begun under the the False Claims Act, the federal government's primary weapon in fighting fraud and waste in the health care industry, prosecutors said yesterday.

"Since 1994, we have recovered over $30 million utilizing the False Claims Act to attack health care fraud in Maryland," said Kathleen McDermott, an assistant U.S. attorney in Baltimore who coordinates such cases. "Health care fraud is the No. 2 priority of the U.S. attorney's office, second only to violent crime and narcotics."

Levindale, part of Sinai Health Systems Inc., had submitted numerous room and board claims to Medicare before 1996, according to a federal complaint. The claims were initially denied reimbursement by Medicare.

Levindale recoded and resubmitted the claims, in effect disguising them as new claims for charges such as supplies, prosecutors said.

Joel Suldan, vice president and general counsel for Sinai Health, said the problem boils down to an error in Levindale's patient account billing section.

Levindale, which has 288 beds and is in the 2400 block of W. Belvedere Ave., merged with Sinai in 1996.

"Levindale clearly billed for things it was not entitled to bill for, as a result of an honest mistake," Suldan said. "The director of patient accounts thought he was following instructions correctly."

An investigation by the FBI and Maryland's Health Care Fraud Task Force determined that Medicare paid Levindale $397,000 for 75 improperly recoded claims, according to the settlement agreement filed in U.S. District Court in Baltimore. The fraud task force discovered the billing discrepancies during a spot check of Levindale's accounts.

Levindale agreed to settle the case for the much higher $827,000 because the False Claims Act allows the government to assess violators up to three times the amount of the false claims, Assistant U.S. Attorney Allen F. Loucks said.

As part of the settlement, Levindale entered into a five-year "corporate integrity agreement" calling for it to set up training programs for its employees and to audit its accounts to prevent other problems, Loucks said.

The money recovered in the settlement will be put into the Medicare Trust Fund, the main account for Medicare.

Federal prosecutors in Maryland say health care fraud has become such a priority that they recently invited health care providers to their usually closed task force meetings on the subject.

"The purpose of the meetings is to encourage prevention and communication on health care fraud issues and to show how fraud has become a crisis for our health care system," McDermott said.

Last year, Medicare lost about $20.3 billion nationally to fraud, waste and error, according to a federal audit.

Congress has acted aggressively to curb Medicare waste in recent years. Last year, lawmakers dedicated $104 million to federal investigations.

Pub Date: 6/16/98

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