Electronic Health Records

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62 Hospitals Sued for Overbilled Patient EHRs, Falsified Claims

A host of Indiana hospitals and a Georgia-based corporation have been sued for falsifying records and overbilling for patient EHRs.

Patient EHRs

Source: Thinkstock

By Kate Monica

- Sixty-two Indiana hospitals are being sued in a federal civil lawsuit for allegedly falsifying records and participating in a kickback scheme by overbilling for the release of patient EHRs.

Unsealed court documents revealed the hospitals allegedly made false claims to defraud taxpayers of more than $300 million.

South Bend-based Memorial Hospital, Saint Joseph Regional Medical Center in Mishawaka, and Saint Joseph Regional Medical Center in Plymouth are among the 62 hospitals accused of participating in the scheme. A Georgia corporation — CIOX Health — has also been accused of being on the receiving end of the more than $300 million in taxpayer dollars.

The South Bend Tribune reported lawyers Michael Misch and Bradley Colborn of the South Bend law firm Anderson, Agostino & Keller accused CIOX Health and the involved hospitals of receiving the money “in a fraudulent manner that constitute false claims for public funding.”

The lawyers filed the complaint in September of 2016 on behalf of the US and the state of Indiana after running up against problems when attempting to obtain patient EHRs from local hospitals in their work as personal injury and malpractice lawyers.

Misch and Colborn claim the hospitals violated provisions of the American Recovery and Reinvestment Act of 2009. The act was put in place to create grant programs to fund hospital EHR implementations. As part of the act, hospitals must release information showing how many requests for patient EHRs they received in a year, and state whether the records were given in response to the requests within three business days. Hospitals unable to turn over at least half of their requests within the allotted time frame were deemed ineligible to receive funding.

Starting in 2013, Misch and Colborn started tracking instances in which they received patients EHRs from four hospitals. The two logged the number of times it took longer than three business days to obtain EHRs and compared their numbers to those recorded in the hospital’s public disclosures.

Misch and Colborn found Memorial Hospital reported 16 requests for patient EHRs had been issued in 2013, and claimed all 16 requests had been fulfilled within the three day window.

However, the lawyers stated they requested health records for five patients between April and December 2013, and received patient health records electronically only once. Furthermore, none of the requested health records had been issued within the required three day timeframe.

In addition to Memorial Hospital, Misch and Colborn claimed they found discrepancies between the numbers recorded in hospital public disclosures and the numbers recorded in their own personal log for three other hospitals.

The four hospitals Misch and Colborn suspected of misrepresenting data about patient EHR requests all contracted CIOX Health to handle the requests.

After looking over disclosures other hospitals and noting a statistical correlation that indicated the hospitals were also falsifying patient EHR request records, lawyers added 58 other hospitals to the suit.

In addition to allegations of falsified claims, the Misch and Colborn also allege hospitals allowed a third-party company to profit off the release of patient EHRs in violation of the federal Anti-Kickback Statute and state law.

CIOX Health “routinely and repeatedly” overbilled patients for their own EHRs, according to lawyers.

Damages sought by Misch and Colborn could exceed $1 billion.

Legal issues surrounding kickback payments have been cropping up across the healthcare industry for years.

In May of 2017, eClinicalWorks agreed to pay $155 million to resolve allegations it had misled consumers about the certification of its EHR technology and paid some customers kickbacks in return for positive product promotion.

This month, eClinicalWorks was sued for nearly $1 billion over faulty patient EHRs that may have compromised patient safety by displaying incomplete or inaccurate information.

In March of 2014, two owners and several employees of Spectrum Care, PA in Houston, Texas were convicted for participating in a fraud scheme resulting in nearly $97 million in fraudulent Medicare billing.

Owners and physicians Mansour Sanjar and Cyrus Sajadi were also convicted of paying illegal kickbacks by signing admission and other documents to bill Medicare for administering outpatient treatment for severe mental illness to unqualified patients. Additionally, the physicians billed Medicare for services that were not provided.

Patient recruiters were paid kickbacks in return for referring ineligible patients to Spectrum. Some patients of Spectrum also received kickbacks. 

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