Banner Health has agreed to pay the United States over $18 million to settle allegations that 12 of its hospitals in Arizona and Colorado knowingly submitted false claims to Medicare by admitting patients who could have been treated on a less costly outpatient basis, the Justice Department announced today. Headquartered in Arizona, Banner Health owns and operates 28 acute-care hospitals in multiple states. The settlement resolves allegations that 12 Banner Health hospitals knowingly overcharged Medicare patients unnecessarily. In particular, the United States alleged that from Nov. 1, 2007 through Dec. 31, 2016, Banner Health billed Medicare for short-stay, inpatient procedures provided at the 12 hospitals that should have been billed on a less costly outpatient basis. The settlement also resolves allegations that Banner Health inflated in reports to Medicare the number of hours for which patients received outpatient observation care during this time period.
Banner Health also entered into a corporate integrity agreement with the U.S. Department of Health and Human Services – Office of Inspector General (HHS-OIG) requiring the company to engage in significant compliance efforts over the next five years. Under the agreement, Banner Health is required to retain an independent review organization to review the accuracy of the company’s claims for services furnished to federal health care program beneficiaries. This settlement resolves a lawsuit filed in the U.S. District Court for the District of Arizona by Cecilia Guardiola, a former employee of Banner Health, under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens to bring lawsuits on behalf of the United States and obtain a portion of the government’s recovery. Guardiola will receive roughly $3.3 million. The case is captioned United States ex rel. Guardiola v. Banner Health and NCMC, Inc. No. 2:13-cv-02443.
Jeffrey Newman represents whistleblowers