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UPMC to pay $1.5 million to settle with federal government

Wednesday, June 05, 2002

By Torsten Ove, Post-Gazette Staff Writer

The UPMC Health System has agreed to pay $1.5 million to the federal government to settle charges that two of its hospitals billed Medicare for surgical procedures using medical devices that had not been approved by the Food and Drug Administration.

The federal government had alleged in a civil complaint that UPMC Presbyterian and UPMC Shadyside hospitals sought reimbursement from Medicare for services that officials knew could not be reimbursed, a violation of the federal False Claims Act.

The hospitals submitted claims for more than 100 procedures performed on Medicare beneficiaries between Sept. 1, 1988, and Feb. 7, 1994. The claims involved "investigational" devices, mostly cardiac implants such as stents and catheters, which had not been approved by the FDA for general use because medical trials hadn't been finished.

The investigation of UPMC, which began in 1996, was part of a nationwide probe of similar Medicare fraud at other hospitals.

U.S. Attorney Mary Beth Buchanan said the settlement was reached with the cooperation of UPMC. In addition to the payment, the hospitals will have to conduct "compliance activities" related to experimental devices for the next three years, such as training of staff about proper billing procedures.

Jane Duffield, a UPMC spokeswoman, said the hospital did not believe it did anything wrong, and settled to avoid further litigation costs. The case involved differing interpretations of complicated Medicare billing rules that have since been changed, she said, and patient care was never compromised.

The case against UPMC stems from a "whistleblower" lawsuit filed by a former medical device salesman, who will receive 20 percent of the settlement amount. The government has settled claims against 24 hospitals, totaling more than $35 million, so far, according to lawyers for the whistleblower.

The investigation was conducted by the civil division of the U.S. attorney's office, the Department of Justice and the Department of Health and Human Services.

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