BILLING FRAUD More than 30 hospitals allegedly billed outpatient kyphoplasty as a more expensive inpatient procedure to increase their Medicare payments.

Thirty-two hospitals located across the country recently settled with the U.S. Department of Justice for $28 million as part of a lawsuit that claimed the hospitals defrauded Medicare by billing kyphoplasties as inpatient procedures instead of outpatient ones. These facilities are part of 130 total hospitals that have settled with the federal government for more than $105 million, the DOJ announced.

Kyphoplasty is a minimally invasive spine procedure meant to treat small fractures that typically can be performed on an outpatient basis, according to the agency. Like vertebroplasty, kyphoplasty injects special cement into your vertebrae — with the additional step of creating space for the treatment with a balloon-like device. However, the hospitals in the settlement allegedly billed the outpatient procedure as a more expensive inpatient one to increase their Medicare payments.

"Charging the government for higher-cost inpatient services that patients do not need wastes the country's vital healthcare dollars," says Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department's Civil Division, in a statement. The DOJ added that "the claims resolved by these settlements are allegations only, and there have been no determinations of liability."

The Cleveland Clinic, one of the accused hospitals, stresses that this was a billing dispute and notes that all of the kyphoplasties it performed were deemed medically necessary. "The issue concerned whether the procedure, in certain cases, should have been billed as an outpatient or inpatient procedure," says the Cleveland Clinic in a statement.

In addition to these recent payments, the government also previously settled with Medtronic Spine, the corporate successor to spine device manufacturer Kyphon Inc., for $75 million. The government alleged that the company counseled hospitals to perform the kyphoplasty procedures as inpatient rather than outpatient procedures, causing the false claims to be submitted. Two whistleblowers that previously worked at Kyphon brought on the lawsuit in 2005, and as part of the settlement will receive a total of $4.75 million, according to the DOJ.

The 32 hospitals part of the recent settlement include: The Cleveland (Ohio) Clinic; Citrus Memorial Health System in Iverness, Fla.; Cullman (Ala.) Regional Medical Center; Martin Memorial Medical Center in Stuart, Fla.; MultiCare Tacoma (Wash.) General Hospital; Norwalk (Conn.) Hospital; Princeton (W. Va.) Community Hospital Association; Sacred Heart Medical Center in Spokane, Wash.; Sarasota (Fla.) Memorial Hospital; Spartanburg (S.C.) Regional Health Services District Inc.; St. Cloud (Minn.) Hospital; Tampa (Fla.) General Hospital; 5 hospitals affiliated with Community Health Systems Inc., in Franklin, Tenn.; 5 hospitals affiliated with Tenet Healthcare Corporation in Dallas, Texas; 5 hospitals formerly owned and operated by Health Management Associates in Naples, Fla.; 3 hospitals affiliated with Baycare Health System in Clearwater, Fla.; and 2 hospitals affiliated with Banner Health in Phoenix, Ariz.

Kendal Gapinski