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PENNSYLVANIA HOSPITAL TO PAY UNITED STATES

WASHINGTON, D.C. -- Allegheny General Hospital in Pittsburgh, Pennsylvania, has agreed to pay $3.2 million to the United States to settle allegations that the facility billed Medicare for surgical procedures utilizing medical devices which had not been approved by the Food and Drug Administration (FDA), the Justice Department announced today.

The United States alleges that Allegheny had violated the False Claims Act by knowingly seeking payment for services that the hospital was aware were non-covered by Medicare and for which reimbursement was not permitted. Allegheny, together with the physicians who actually performed the procedures, submitted claims for more than 170 procedures performed on Medicare beneficiaries between September 1, 1988 and February 7, 1994, all of which involved so-called "investigational" or experimental devices.

"Today's settlement again demonstrates the United States' commitment to protecting its citizens from fraud and abuse," said David W. Ogden, Assistant Attorney General in charge of the Civil Division. "The Medicare system operates on the good faith and honesty of its providers, and we cannot tolerate misuse of the reimbursement system by facilities and practitioners who seek payment for non-covered services."

As part of the settlement, Allegheny will be required to conduct compliance activities related to procedures involving investigational devices for a period of five years. The compliance activities will include the education and training of Allegheny personnel in policies for the billing of investigational devices and procedures. Allegheny will be required to provide annual reports of its compliance activities.

"The rules for coverage limitations provide important protection to patients against fraud and abuse," said U.S. Attorney Harry Litman. "We will continue to be vigilant to keep providers from attempting to circumvent the requirements of federal law."

The settlement announced today stems from a qui tam or whistleblower lawsuit filed by a former medical device salesman. The whistleblower or "Relator" will receive a 20% share of the settlement amount.

The government's investigation was led by the Civil Division of the United States Attorney's Office for the Western District of Pennsylvania, in collaboration with the Commercial Litigation Branch of the Civil Division of the Department of Justice, and the Office of Inspector General of the Department of Health and Human Services.

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