Hill-Rom to pay $42M to settle Medicare false claims case

September 28, 2011 by MassDevice staff

Hill-Rom Holdings Inc. (NYSE:HRC) agreed to pay $41.8 million to settle a federal case alleging that it billed Medicare and Medicaid for bed support devices even though it knew the patients were not eligible – and, in at least three cases, after the patients had died.

The whistleblower lawsuit, originally filed in April 2005, accused the company of submitting the false claims between 1999 and 2007, according to court documents.

"Hill-Rom knew and recklessly disregarded the fact that it had submitted claims for beneficiaries that no longer met Medicare criteria and conditions for payment," according to the documents.

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The allegedly false claims were made despite an internal audit Hill-Rom conducted in September 2003 "finding that it could not verify or support medical necessity for 65 of the 99 beneficiaries in the audit," according to the documents.

"Despite the results of its internal audit, Hill-Rom subsequently submitted claims ... for 44 of the 65 beneficiaries it had identified as lacking support for continuing medical necessity," according to the documents.

The two former employees who filed the suit, Laurie Salmons and Lisa Brocco, estimated that Hill-Rom billed Medicare for about $30 million a year "on patients who did not qualify based on medical necessity," according to the lawsuit.

The settlement, which does not include an admission of guilt, does include $175,000 worth of legal fees the company will pay to Salmons and Brocco. They'll split nearly $8.4 million of the settlement, according to the documents.

Hill-Rom said it's glad to put the case behind it, even though it disputes the government's allegations.

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