Duke Health to pay $1M penalty for overcharging government

Posted March 21, 2014 2:40 p.m. EDT
Updated March 21, 2014 4:09 p.m. EDT

— Duke University Health System has agreed to pay $1 million to settle allegations that it overcharged government insurance programs, state and federal authorities said Friday.

Leslie Johnson, a former employee of a Duke Health-owned firm that handles billing and collection services for the hospital system, filed a whistleblower lawsuit in December 2012 under the False Claims Act, which attracted the attention of the U.S. Attorney's Office and the North Carolina Attorney General's Office.

"Health care fraud like this wastes tax dollars, harms patients who need care and drives up medical costs for all of us,” Attorney General Roy Cooper said in a statement. “We’re working closely with federal officials to root out this kind of fraud in North Carolina and make wrongdoers pay."

Duke Health allegedly overcharged the Medicare, Medicaid and TRICARE insurance programs by billing the government for services provided by physician
assistants during coronary artery bypass surgeries when they were acting as surgical assistants and by unbundling claims in connection with cardiac and anesthesia services to increase costs, authorities said.

Authorities didn't specify when the alleged overbilling occurred or which of Duke's three area hospitals – Duke University Hospital and Duke Regional Hospital in Durham and Duke Raleigh Hospital in Raleigh – was involved. Duke Medicine spokesman Doug Stokke said the $1 million settlement covers disputed charges over a six-year period.

Duke denies any illegal activity, blaming any overcharges on "an undetected software problem" and "possible misapplication of certain technical billing requirements," Stokke said in a statement.

"Duke had no intent to submit inaccurate claims and denies that it violated the False Claims Act," he said. "DUHS has a robust corporate compliance program and is committed to the highest standards of ethics and integrity in all of our interactions with governmental health care programs."