Deeper Than the Headlines: Brattleboro Hospital

The Vermont hospital, Brattleboro Memorial, recently paid $1.6 million to the U.S. and State of Vermont to resolve allegations of false claims. The lawsuit was filed by a former employee under the whistleblower provisions of both the federal False Claims Act as well as the Vermont False Claims Act.

Brattleboro Memorial is a not-for-profit community hospital located in southeastern Vermont. The relator, or whistleblower, filed her complaint on February 5, 2016. The United States Attorney’s Office for the District of Vermont intervened in that action on February 22, 2018 after having investigated and resolved the matter. The government contends that from approximately January 2012 through September 2014 Brattleboro Memorial knowingly submitted a number of outpatient laboratory claims lacking documentation necessary to support reimbursement by Medicare and Medicaid. According to the complaint filed, it was alleged the hospital had “systematic switches" in billing categories whereby defendant billed the programs for inpatient services that were later switched outpatient without notifying the programs; in those instances defendant was reimbursed at a considerably higher rate for inpatient services.”

One of the emails submitted to the court as potential evidence stated:

“So I also don't see in the BAA folder a BAA with Valley Pathology Associates or their Billing group McKesson. Shouldn't there be one since we are exchanging PHI with them?

We are sending them a file. Clearly they are doing whatever they want with it. Another thought is. If there is clinical oversight then isn't he responsible for the fact we have all these accounts that have no diagnosis to be compliant with CMS billing regulation?

Not covered by Medicare B, not covered by BCBS VT, no covered by Cigna, VT Medicaid not allowed, NH Medicaid not paying Patients complaining. Misrepresenting when we are quoting lab charges on patient pricing line."

The relator, Amy Beth Main, was the hospital’s director of patient financial services beginning in July of 2014. According to court records, she managed the daily operations of the business office including admissions, billing, collection/cashiering and switchboard functions; established policies, procedures, standards and objectives for various departments. She was responsible for hospital wide telecommunications budget and operations. She developed long-term accounts receivable strategies to maximize reimbursement, expedite cash flow and keep account receivables at appropriate levels. She shared responsibility for ensuring that hospital activities were consistent with its policies and governmental and third-party regulations for billing and collection practices.

Among the allegations made by the relator, was the hospital incorrectly coding so that they were reimbursed at a higher level than they should have been. She included many documents in the complaint she filed. Chief among them was a revenue cycle report which summarized findings from an outside consulting firm which had performed a review.

SOME OF THE KEY FINDINGS CITED IN THIS REPORT WERE:

• Establish a defined status management process to improve financial outcomes and adhere to federal regulations
• A nationally recognized medical necessity tool is not used to determine appropriate patient status
• Patient status management is often reactive and not completed in accordance with federal regulation
• Condition Code 44 is not followed for Medicare/Medicaid patients
• Observation time carve-outs are not completed when submitting total observation hours

RECOMMENDATIONS FROM THE EXTERNAL FIRM INCLUDED:

• Select a nationally recognized screening tool that will enable staff to consistently screen patients for medical necessity
• Move all diagnosis coding to the medical records department
• Non-coding certified billers should not be coding

In the government’s press release, U.S. Attorney Christina Nolan stated, “Health care providers doing business in Vermont need to have systems in place to ensure that the claims they submit for taxpayer reimbursement are valid under the governing rules and regulations. We will hold accountable those who knowingly or recklessly bill the government for health care services without proper documentation to support their claims.”

The government’s press release also states the settlement and payment are neither an admission of liability by the hospital, nor a concession by the United States or State of Vermont that their claims are not well founded. It’s not always possible to know all the details of this case unless you have access to all the facts. But reviewing the materials that are available can give you insights into the tone and culture of the organization as well as decisions that might have been made that lead to the lawsuit.

The case citation is 2:16-cv-00040-wks United States of America v. Brattleboro Memorial Hospital, Inc. from the district of Vermont.