Hospital Owner and Hospitalist Group Agree to Pay $560K to Settle False Claims Act Allegations

The United States Attorney for the District of Connecticut and the Connecticut Office of the Attorney General today announced that YALE NEW HAVEN HEALTH SERVICES CORP. and NORTHEAST MEDICAL GROUP, INC. have entered into a civil settlement agreement with the federal and state governments and have paid $560,718.48 to resolve allegations that they violated the federal and state False Claims Acts for submitting false claims to Medicare and Medicaid for services billed by physicians when, in fact, the services should have been billed by mid-level providers at a lower reimbursement rate.

Yale New Haven Health Services Corp. (“Yale”) is a nonprofit health system that owns several acute-care hospitals, including Bridgeport Hospital.  Northeast Medical Group, Inc. (“Northeast Medical”) employs internal medicine hospitalist physicians and mid-level providers (i.e., advanced practice nurse practitioners and physician assistants) at Bridgeport Hospital. Northeast Medical is an affiliate of Yale, and outsources its billing, coding, and compliance to Yale.

The federal and state governments allege that, between July 2014 and June 2020, Yale and Northeast Medical violated the federal and state False Claims Acts by submitting false claims to Medicare and Medicaid for evaluation and management services billed by Northeast Medical hospitalist physicians to Bridgeport Hospital patients that did not satisfy certain billing requirements and, instead, should have been billed by mid-level providers.  As a result, Yale and Northeast Medical improperly received 10 to 15 percent higher in Medicare and Medicaid reimbursements for the allegedly falsely billed hospitalist physician services. To resolve their liability, Yale and Northeast Medical have paid $560,718.48.

The False Claims Act allegations resolved by the settlement were originally brought in a lawsuit filed by a whistleblower under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery.  The relator (whistleblower), a former employee of Northeast Medical, will receive $106,536.51 as her share of the recovery. The case resolved by this settlement was captioned U.S. ex rel. Cadariu v. Northeast Medical Group et al. (Docket No. 19-cv-904).

This matter was investigated by the Office of Inspector General for the Department of Health and Human Services. The case is being prosecuted by Assistant U.S. Attorney Sarah Gruber, and by Assistant Attorney General Rick Porter of the Connecticut Office of the Attorney General.

People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS.