Mercy Hospital Pays $1,514,000 to Settle False Claims Act Allegations

Portland, Maine:  United States Attorney Halsey B. Frank today announced that Mercy Hospital (“Mercy”), of Portland, has entered into a civil settlement agreement with the United States and the State of Maine in which it will pay $1,514,000 to resolve allegations that it violated the federal and Maine False Claims Acts.  See United States v. Mercy Hospital, 17-cv-00429-JAW (D. Me.).

The settlement resolves allegations that Medicare and MaineCare were overbilled for urinalysis drug screening tests ordered and performed at the former Mercy Recovery Center in Westbrook, Maine, from 2011 through 2013.  In October 2013, Mercy and its affiliate, Mercy Recovery Center, were acquired by Eastern Maine Healthcare Systems (“EMHS”).   

The allegation was that Mercy falsely used a billing modifier code to receive payment for multiple same-day urinalysis drug screening tests at Mercy Recovery Center that did not arise from separate, medically necessary encounters with the same patients on the same days.  The urinalysis drug screening tests should have been bundled and billed as one claim per each single patient encounter.  Instead, Mercy separately billed for the urinalysis drug screening tests on a per-test basis.  As a result, Medicare and MaineCare overpaid Mercy on multiple claims.

Mercy cooperated with the investigation.  In addition, Mercy and EMHS implemented enhanced internal compliance measures in response to the overbilling issue.  Federal and state authorities encourage health care providers to cooperate with its investigations of the possible submission of improper claims to federal and state programs.

The case was investigated by the Office of Inspector General for the United States Department of Health and Human Services.