Kapiolani Health
By Helen Altonn
to pay $3.4 million
Star-BulletinA $3.4 million settlement has been paid by Kapiolani Health to resolve allegations of false billings to Medicare and Medicaid programs by two subsidiaries, U.S. Attorney Steven S. Alm said today.
He said it's the largest settlement in a case of this type in Hawaii.
Kapiolani Health officials had no immediate comment.
The allegations involved billings by Kapiolani Home Health Services and Kapiolani Extended Care, among the companies under the Kapiolani Health parent corporation. Both have stopped operations.
Kapiolani Health denied the allegations and admitted no wrongdoing by entering into the settlement. It retains the right to participate in Medicare and Medicaid programs.
A former Kapiolani Home Health Services employee filed a complaint in July 1997 in federal court against the two subsidiaries alleging they had improperly billed the government programs for home health services and medical equipment, Alm said.
A home health agency, KHHS provided skilled nursing care, physical therapy and other services to housebound patients. Kapiolani Extended Care provided durable medical equipment and intravenous drugs to patients.
The settlement covered allegations that KEC and KHHS submitted false claims from July 1, 1995, through Aug. 31, 1997, ranging from services to patients who weren't homebound to services that weren't reasonable or necessary or weren't authorized by a physician.
Other allegations were that duplicate claims were submitted and services were provided to ineligible people.
The False Claims Act permits private citizens to file a lawsuit in the name of the United States. The complaint was under seal during the investigation.
The law provides for recovery of triple damages, plus penalties of up to $10,000 for each false claim. If a lawsuit is successful, the person who filed it can receive up to 30 percent of the recovered funds, as well as their attorneys' fees and expenses.
Under the settlement, Kapiolani Health will pay the state $700,000, the United States, $2.52 million and the former employee's attorneys' fees and expenses of $180,000.
The KHHS employee who filed the suit also will receive $630,000 from the U.S. government's recovered money.
The investigation was conducted by the state Attorney General's Medicaid Investigations Division, the U.S. Attorney's Office, the Federal Bureau of Investigation and the Office of Inspector General of the U.S. Department of health and Human Services.
