Facts

Comprehensive Cancer Centers Inc. managed the outpatient cancer center at the Desert Regional Medical Center, in Palm Springs. Kay Green, a former Desert Regional employee, filed suit against CCC pursuant to the qui tam provisions of the False Claims Act.

CONTENTIONS:
The qui tam plaintiff alleged that CCC repeatedly overcharged Medicare by improperly using a certain diagnostic code that is supposed to only be used when separate and distinct medical procedures are performed on the same patient, on the same day. Instead, plaintiff contended that CCC was using the code to bill related procedures separately in order to receive higher reimbursements than the amount to which CCC was actually entitled. She alleged that CCC engaged in this practice of billing separately for related procedures that should have been billed as one, known as "upcoding" between 1997 and 2003. Finally, she claimed that CCC submitted cost reports to Medicare that sought reimbursement for unreasonable management fees as well. CCC denied any wrongdoing.

Damages

The government sustained approximately $450,000 in damages.

Result

CCC agreed to pay $900,000 in exchange for dismissal of suit, but did not admit to any wrongdoing.

Other Information

The False Claims Act mandates that the qui tam plaintiff receive a percentage of any recovery. Thus, Green will receive $189,000, approximately 21 percent of the total recovery. CCC paid half of the settlement on Oct. 25, 2006. The remaining half, plus interest, will be paid on Dec. 8, 2006. Desert Regional is owned by Tenet Healthcare Corp., which was also named as a defendant in the suit, but was not party to the settlement. Tenet settled with the government in the amount of $452,417 for itself and Regional in July. Tenet's settlement was part of a global $900 million settlement negotiation to resolve similar claims against it from around the country. The $900 million settlement is the largest False Claims Act settlement in the law's 150 year history.