Community Health reaches $20.3 milling settlement to resolve charges of surgery overbilling

One of Indiana's largest health and hospital networks reached a $20.3 million settlement with the federal government to resolve allegations of overbilling the Medicaid and Medicare programs for surgeries, the U.S. attorney announced Tuesday.

Community Health Network, which operates eight hospitals in Indianapolis, Anderson and Kokomo, and more than 200 care sites in and around those cities, referred patients to outside surgery centers to save them money but then billed Medicare and Medicaid as if the surgeries were performed at its own hospitals, according to Josh Minkler, the U.S. attorney for the Southern District of Indiana.

The Centers for Medicare and Medicaid Services notified hospitals in November 2007 that services provided at outside centers should be billed at the generally lower outside rates, but Community Health continued overbilling until Oct. 1, 2009, Minkler said.

The settlement capped an investigation conducted by the inspector general of the U.S. Department of Health and Human Services, the FBI and Indiana attorney general's Medicaid Fraud Control Unit.

Community Health said in a statement that the settlement resolved claims submitted to Medicaid and Medicare between Jan. 1, 2006, and Oct. 1, 2009. During that period and before, the network was open and transparent with the government about its billing method and sought both the government's guidance and outside advice to ensure that practices were in compliance with regulations.

"At most, this was an innocent and unintentional billing error," Community Health Network President and CEO Bryan Mills said. "In fact, we continually reached out for guidance to assure our billing method was appropriate."

The government did not seek any financial penalties beyond the repayment, Mills said.

Community Health also entered into a corporate integrity agreement with HHS that includes compliance mechanisms designed to ensure that all future billings to the Medicare and Medicaid programs are appropriate.

The HHS Office of the Inspector General said it found no evidence that patients were harmed by Community Health's practice.