QUI TAM/FALSE CLAIMS
U.S. v. Battle Creek Health Sys., No. 04-1418 (6th Cir. Aug. 22, 2005)
A certified
registered nurse/anesthetist brought a qui tam suit against a hospital, alleging
that the hospital violated the False Claims Act by charging Medicare for entire
multidose vials of anesthetic medication when less than the full vial of medication
was administered. The hospital argued successfully to the district court that
its policy of charging for entire multidose vials did not result in increased
expenditures by Medicare because Medicare reimbursement payments for outpatients
were based on a cost, not charge, basis. The hospital claimed it charged Medicare
a "flat fee" for the vials and subsequently reimbursed
Medicare for any overpayment during an end-of-year audit. The Sixth Circuit Court
of Appeals found that the hospital's billing records did not reflect a uniform, "flat
fee" charge to Medicare. Moreover, the court concluded that if the hospital
made false statements during the interim payment phase of Medicare payments,
it would not be immune from False Claims Act liability simply because it reimbursed
Medicare after final settlement of the cost report.