United States Attorney's Office District of Connecticut
Press Release

DANBURY HOSPITAL ENTERS INTO CIVIL SETTLEMENT AGREEMENT

Kevin J. O’Connor, United States Attorney for the District of Connecticut, today announced that DANBURY HOSPITAL, INC., located at 24 Hospital Avene, Danbury, Connecticut has entered into a civil settlement agreement with the Government to resolve allegations that it violated the False Claims Act by submitting false claims to the Medicare program.

U.S. Attorney O’Connor explained that the settlement arises out of allegations that DANBURY HOSPITAL improperly assigned certain billing codes to patient hospital stays, causing the hospital to receive excessive reimbursement from the Medicare program. The codes in question, diagnosis related group or “DRG” codes, are used to classify patients by their diagnosis. These diagnostic classifications, in turn, determine the amount of payment hospitals receive from Medicare. Incorrect diagnostic coding can dramatically affect the reimbursement a hospital receives. DANBURY HOSPITAL allegedly assigned codes to various patients that did not accurately reflect the patients’ diagnosis, causing the hospital to be paid at a significantly higher reimbursement rate than if the hospital had assigned the correct code (a process known as “upcoding”). The codes in question were for septicemia, respiratory failure, and respiratory infections and inflammations. DANBURY HOSPITAL disclosed the conduct in question to the Government pursuant to the Provider Self-Disclosure Protocol (the Protocol), issued by the Office of Inspector General (OIG), United States Department of Health and Human Services. Under the Protocol, the OIG encourages health care providers to voluntarily disclose matters that may constitute violations of federal criminal, civil or administrative law.

Between October 2000 and June 2003, the improper coding caused DANBURY HOSPITAL to receive excessive payments from the Medicare program in the amount of $1,570,564. In order to resolve potential liability under the False Claims Act, DANBURY HOSPITAL agreed to pay a multiplier of 1.5 times damages, in the total amount of $2,355,846. The False Claims Act provides for treble damages and penalties of $5,500 to $11,000 per false claim submitted to the Government. However, if the person or entity who violates the act discloses the violation to the Government and fully cooperates with any Government investigation of the violation, the Government can recover only up to double damages.

DANBURY HOSPITAL fully cooperated with the Government in its investigation of this case.

Pursuant to the settlement, DANBURY HOSPITAL has also entered into a Certification of Compliance Agreement with the U.S. Department of Health and Human Services that is designed to ensure future compliance with the requirements of the Medicare Program.

“The health care system relies on hospitals to bill Medicare honestly and accurately,” U.S. Attorney O’Connor stated. “Billing Medicare for patient stays that do not accurately reflect the patients’ diagnosis, resulting in excessive payments, damages the fiscal integrity of the Medicare program.”

In entering into the civil settlement agreement, DANBURY HOSPITAL did not admit liability and the agreement indicates that the parties entered into the settlement to avoid the uncertainty and expense of litigation.

People who suspect health care fraud are encouraged to report it by calling the Health Care Fraud Task Force at (203) 785-9270 or 1-800-HHS-TIPS.
This case was prosecuted by Assistant United States Attorney Richard M. Molot and Auditor Kevin Saunders.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov