Fraud and Abuse – Two Hospitals Implicated for Participation in Laboratory Arrangements.

Jay D. Reyero | 6.8.18

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Continuing the trend of heightened regulatory enforcement in the area of fraud and abuse and anti-kickback, two hospitals are also finding themselves at the center of controversy.

In Texas, Bay Area Regional Medical Center (“BARMC”) has been implicated in medical billing fraud and anti-kickback violations as a result of its relationship with Dallas- and Houston-based laboratories.  In part, the allegations claim the laboratories used BARMC’s in-network contract with Aetna in order to bill for services when the services were not performed by BARMC and the patient did not visit BARMC. BARMC was not named in the litigation but abruptly closed in early May.

In Missouri, a similar arrangement caused Missouri’s U.S. Senator to call for a federal investigation into Putnam County Memorial Hospital (“Putnam”).  An audit conducted in late 2017 uncovered approximately $90 million in questionable insurance payments based on Putnam’s relationship with out-of-state laboratories where Putnam would bill for laboratory services for individuals who were not patients of Putnam.  One example involved a Texas women who never traveled to Missouri receiving a bill for blood work performed by Putnam.

These are just more examples of the need to carefully scrutinize every aspect of a potential arrangement and ensure compliance with all applicable federal and state laws as regulatory enforcement will inevitably continue to increase across the country.

For more information on healthcare regulatory compliance, please feel free to contact Jay D. Reyero (jreyero@byrdadatto.com).

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