Parkland Memorial Hospital pays nearly $1.4 million to resolve allegations it submitted improper physical medicine and rehabilitation claims

By U.S. Department of Justice

Jun 2, 2013

DALLAS - Dallas County Hospital District d/b/a Parkland Health and Hospital System (Parkland) settled allegations it violated the civil False Claims Act and Texas Medicaid Fraud Prevention Act, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. The U.S. and Texas contend Parkland caused unallowable and “upcoded” physician consultations and other services to be submitted to Medicare and Texas Medicaid for certain physical medicine and rehabilitation (PMR) related items and services between 2007 and 2011. Parkland fully cooperated with the investigation, and by settling, did not admit any wrong-doing or liability.

When patients are admitted to a hospital, specialists, like PMR physicians, often consult with the attending physician on a variety of issues. At teaching hospitals, faculty physicians may bill for the supervision of residents, if present for the key or critical portions of the services. In both cases such consults, if medically appropriate, are reimbursed by Medicare and Texas Medicaid. The United States and Texas based their investigation on allegations that Parkland submitted or caused the submission of false and fraudulent PMR claims, and false statements in support of such claims, to the Medicare and Texas Medicaid programs between 2007 and 2011 for: (1)consultations that were never requested by a patient’s treating physicians and/or lacked medical necessity; (2) services related to the inappropriate supervision of residents and/or lacked medical necessity; (3) up-coded and inflated evaluation and management services; (4) inpatient rehabilitation stays that did not meet billing requirements; and (5) other unreimbursable costs.

The U.S. and Texas initiated the investigation in response to a March 2010 whistleblower suit brought by Lien Kyri, M.D., a former resident in the PM&R department, UTSW Medical Center at Dallas. Under the False Claims Act and Texas Medicaid Fraud Prevention Act, private individuals may bring actions alleging fraud on behalf of the U.S. and Texas and collect a share of any proceeds recovered by the suit. Dr. Kyri may receive up to 30% of the recovery under the settlement. U.S. Attorney Saldaña praised the efforts of the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) and the Texas Medicaid Fraud Control Unit. U.S. Attorney Saldaña also noted “this settlement demonstrates the Northern District of Texas, and the entire Department, remain committed to investigating allegations of health care fraud, regardless of provider or affiliation.” “Any time false claims are submitted for payment, the nation’s taxpayers and health insurance programs suffer,” said Special Agent in Charge Mike Fields of the OIG’s Dallas Regional Office. “Our agents will continue working to identify providers who manipulate the system to grab precious Medicare and Medicaid dollars to which they are not entitled.”

In addition to paying nearly $1.4 million, Parkland agreed to enter into with the OIG a five-year corporate integrity agreement (CIA) in exchange for release of the agency’s administrative remedies. The CIA requires Parkland to enact and report to the OIG its compliance with billing rules, but also will monitor Parkland to ensure patients receive appropriate care.

The case was handled by Assistant U.S. Attorney Sean McKenna and Assistant Texas Attorney General Paula Juba. The case is captioned United States ex rel. Kyri v. Dallas County Hospital District d/b/a Parkland Health and Hospital System, et al.; Civil Action No. 3:10-cv-0487-D (N.D. Tex.).