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Lawsuit: 62 Indiana Hospitals Made Fraudulent Claims to Get Federal MU Dollars

November 28, 2017
by Rajiv Leventhal
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According to a report, lawyers in South Bend, Ind. say that the involved hospitals “systematically falsified records and defrauded taxpayers of more than $300 million”

Two lawyers in South Bend, Indiana are claiming that 62 Indiana hospitals made false claims to receive federal grant dollars and participated in kickback schemes by overbilling for the release of electronic medical records.

According to a Nov. 25 report in the South Bend Tribune, the lawyers claim that the 62 hospitals “systematically falsified records and defrauded taxpayers of more than $300 million.” Michael Misch and Bradley Colborn, attorneys for South Bend law firm Anderson, Agostino & Keller, brought the suit in Sept. 2016 on behalf of the U.S. and state of Indiana after experiencing difficulties in obtaining EMRs from local hospitals in their work on personal injury and medical malpractice cases, according to the report.

The federal civil lawsuit attests that the hospitals involved violated provisions of the American Recovery and Reinvestment Act of 2009, legislation passed during the Obama administration that created grants to enable and assist hospitals in implementing electronic medical record (EMR) systems. According to the Tribune report, to receive the grants, as per the first stage of the federal meaningful use program, hospitals had to release information that showed the number of medical records requests annually and if the records were turned over to those requesting them within three business days. Hospitals that failed to achieve at least 50 percent of their requests within the time frame would not be eligible to receive funding.

As such, the lawyers began tracking the instances where they received electronic records from four hospitals beginning in 2013. The lawyers logged the number of times they received records after the required three business day period, and compared those numbers to the hospitals’ public disclosures.

That lawsuit said that in 2013, one of those institutions, Memorial Hospital, based in South Bend, reported 16 requests for medical records and claimed it provided all 16 within the required three business day period. But the lawyers alleged that on five occasions between April and Dec. 2013, they received records in an electronic format only once and none of the records were issued within three business days, contradicting what the hospital reported. The pair claim to have found similar discrepancies with the other three hospitals, including Saint Joseph Regional Medical Center in Mishawaka and St. Joseph Regional Medical Center in Plymouth.

What’s more, the Tribune reported that all four hospitals contract the handling of their medical records requests to a vendor corporation in Georgia that is an additional defendant in the case, Ciox Health. The lawyers said that Ciox Health was violating federal law by “routinely and repeatedly” overbilling patients for their own medical records. Healthcare Informatics has reached out to Ciox’s media relations team for a statement, but has not yet heard back.

Additionally, the lawyers tacked on 58 other hospitals to the lawsuit after examining disclosures and identifying a statistical correlation they say proves the hospitals were pursuing similar falsification of records to receive grant dollars. The lawyers said the correlation can be seen by comparing the low number of requests for medical records reported by the 58 hospitals to much higher reports of disclosures from other hospitals nationwide, according to the Tribune report.

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