Denver Health Settles $6.3M Whistleblower Case

By Mike Holter

(LEGAFI) -- Denver Health Medical Center has been ordered to pay $6.3 million to the federal and state governments to settle a whistleblower’s allegations that the hospital fraudulently charged Medicare and Medicaid for “inpatient” stays for people who didn’t receive that level of care.

Whistleblower JoAnn Curren, a former internal auditor, alleged in the Medicare/Meidcaid fraud lawsuit that Denver Health Medical Center overbilled for people as “inpatients’ when they really were receiving lower-cost care under “observation,” or as “outpatients.”

Curren claimed in her whistleblower lawsuit that she was fired for writing internal reports about the fraudulent billing practices and that hospital managers continued the alleged fraud even after she explained the issue and objected. She claims she was fired in January 2009 "in blatant retaliation for having cast light on their unlawful billing practices and refusal to self-report."

The alleged billing fraud occurred from 2006 through July 2009.

Denver Health said in a statement that it changed the practice as soon as it found out and that "it is important to remember that hospital billing is an extraordinarily complex endeavor. The Observation/Short Stay guidance is controversial and subject to questions of medical judgment."

The hospital doesn’t admit fraud in the settlement, under which the whistleblower case was dismissed. However, the government had previously agreed to join Curren’s whistleblower lawsuit and launch its own investigation, a step it normally doesn’t take unless they see substance in the allegations.

Under the federal whistleblower act, Curren will receive just under $818,000, according to the Denver Post. Denver Health will reimburse state Medicaid for $1.1 million and federal Medicare and Medicaid for $5.2 million.

"This case serves as a reminder that hospitals must scrutinize their billing practices to prevent overbilling," said U.S. Attorney John Walsh, in announcing the settlement.