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Sparrow settles civil lawsuit over alleged improper billing practices

Sparrow Hospital
WKAR File Photo
WKAR File Photo

Sparrow Health System has agreed to pay more than $600,000 to the U.S. Department of Justice to settle a lawsuit over improper billing practices.

The U.S. Attorney for the Western District of Michigan announced Wednesday it reached a settlement with Sparrow over alleged violations of the federal False Claims Act. The law holds companies liable for fraudulent claims related to government programs like Medicare and Social Security.

“Truthful and accurate billing is crucial to our Medicare system,” U.S. Attorney Mark Totten said in a news release. “This settlement reflects the commitment of my office in working with our investigative agencies to protect the Medicare population and maintain the system of trust and accountability necessary between the patient, physician, and federal healthcare programs.”

The suit centers around allegations that the hospital sought improper reimbursements for healthcare treatment.

Normally, services offered by a mid-level provider, like a nurse practitioner or physician's assistant, would only be eligible for a partial 85% reimbursement from Medicare. But hospitals can claim 100% reimbursement if a physician is involved in a patient’s care, such as being on-site or establishing their diagnosis and treatment plan.

The U.S Attorney argued Sparrow improperly sought full Medicare reimbursement by claiming a physician rendered medical services when in reality other providers were involved.

The news release states Sparrow fully cooperated with the investigation and shared results from an internal audit with the U.S. attorney's office.

Arjun Thakkar is WKAR's politics and civics reporter.
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