12 February 2005 – LAWFUEL – The Law News Network – Marcos D…

12 February 2005 – LAWFUEL – The Law News Network – Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida,
announced today that Cleveland Clinic Florida Hospital has paid $2.75 million to
the United States to settle allegations that the hospital billed Medicare for
observation services for patients at the Florida hospital that did not qualify for
reimbursement under the Medicare Program. Cleveland Clinic Florida Hospital is an active nonprofit corporation, which previously provided hospital services near Fort
Lauderdale, Florida, but ceased operations on June 30, 2001. The Cleveland Clinic Foundation is the parent company of Cleveland Clinic Florida Hospital.

The settlement agreement resolved allegations by the United States that from 1993 to 2001 the defendant failed to comply with the Medicare coverage requirements, as prescribed and defined by the Centers for Medicare and Medicaid Services, regarding beneficiaries that have been placed in “observation status” in order to receive treatment or be monitored before making a decision concerning their next placement
(i.e., being admitted to the hospital or discharged to home). In particular, the
settlement agreement resolved allegations that Cleveland Clinic frequently billed
Medicare for extra observation charges during normal recovery periods following
minor surgery or emergency room visits. Under Medicare rules, the cost for
monitoring a patient’s status are, in most cases, built into the cost of whole
procedure. To claim an additional “observation” charge, the hospital must meet
specific criteria, such as unexpected complications.

The investigation was prompted by a former employee of the defendant who filed a
qui tam or whistle blower action under the False Claims Act. Under those
provisions, a private party can file an action on behalf of the United States and
receive a portion of the settlement if the government reaches a monetary agreement with the defendants. As a result of today’s settlement, the whistle blower in this case will receive approximately $500,000 of the total recovery as her statutory

Mr. Jiménez commended the investigative efforts of the United States Department of
Health and Human Services, Office of Inspector General. This case is being
prosecuted by Assistant United States Mark Lavine.

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