On November 12, University of Colorado Health (UCHealth) agreed to pay $23 million to settle Department of Justice (DOJ) and whistleblower charges of violating the False Claims Act by fraudulently billing Medicare and Tricare for certain emergency department services.

According to the government, UCHealth used an automatic coding system where it billed certain emergency department services at the highest reimbursement rate even when they did not qualify.  The government claimed the hospital system used this code whenever its health care providers checked a patient’s vital signs more times than the total hours the patient was in the emergency department (unless they were there for less than hour).  The hospitals allegedly coded this way regardless of the severity of the patient’s medical condition or the hospital resources used to treat the patient.

In other words, the government believed UCHealth used this coding system to maximize its Medicare/Tricare reimbursement, not to best capture the most appropriate codes for the emergency services it provided.  As the government highlighted in promoting this settlement, it will not tolerate this kind of medical billing fraud.  DOJ Civil Chief Brian Boynton stressed “improperly billing federal health care programs drains valuable government resources needed to provide medical care to millions of Americans,” and that DOJ “will pursue health care providers that defraud the taxpayers by knowingly submitting inflated or unsupported claims.”

The improper CPT code UCHealth was billing is 99285.  It is supposed to cover the highest level of health severity and hospital resource usage, and typically involves severe medical needs and highly complex medical decision making, hence the higher reimbursement.  The government found UCHealth employed the code for significantly less serious health conditions.

Apparently, the evidence backed up these charges.  As the Settlement Agreement provides, there were numerous complaints from UCHealth coders warning about tying the CPT code to the frequent monitoring of vital signs.  There were complaints from patients, too.  And UCHealth was consistently identified by CMS as a “High Outlier” for billing CPT 99285 during the relevant period, meaning it had a disproportionate number of billings under this code than similarly situated hospital systems.

There was also the whistleblower who originated the action and witnessed firsthand the inflated billings.  According to CBS News, the case was originally filed in 2021 by Timothy Sanders, who worked as a revenue recovery auditor for UCHealth, dealing with complaints from patients who felt they were overcharged.  “He says UCHealth’s automated billing system was overcharging people and that several people on his team, as well as the chief financial officer at the time, knew about it.”

Sanders brought suit under the qui tam provision of the False Claims Act which allows private individuals to bring lawsuits on behalf of the government against those defrauding the government.  If successful, these whistleblowers can recover up to 30% of any government recovery.  In this case, Sanders will receive roughly $3.9 million of the government’s recovery, a result DOJ highlighted in its press release announcing the settlement.

The government is clearly sending a message to other would-be whistleblowers to encourage them to take advantage of this unique provision of the statute.  It also is sending a message to other healthcare providers to warn them against Medicare fraud.  HHS Special Agent Linda Hanley was explicit on this point:

Health care providers that participate in federal health care programs such as Medicare are required to obey laws meant to preserve the integrity of program funds, including requiring that providers submit only appropriate and accurate claims for reimbursement.  As this settlement demonstrates, HHS-OIG and our law enforcement partners will continue working together to protect both public safety and the integrity of our federal health care system.

If you would like to learn more about what it means to be a whistleblower under the False Claims Act, please don’t hesitate to contact us.  We will connect you with an experienced member of our whistleblower team for a free and confidential consult.

Read DOJ Hits University of Colorado Health with $23 Million Penalty for Allegedly Upcoding Emergency Services at constantinecannon.com