Tarrant County Hospital To Pay Over $3M To Settle Whistleblower Lawsuit

Tarrant County’s John Peter Smith Hospital (JPS) agreed to pay more than $3.3 million to settle allegations that it violated the False Claims Act by upcoding certain claims submitted to federal healthcare programs, Acting U.S. Attorney Prerak Shah announced last month.

The settlement resolves a whistleblower suit filed in 2018 by JPS’s former Director of Compliance Erma Lee. Her complaint asserted that the hospital improperly appended billing modifiers to hundreds of claims in order to obtain payments to which it was not entitled.

What are billing modifiers?

Billing modifiers indicate that a provider administered significant care on the same day as another medical procedure was performed that was above and beyond the preoperative and postoperative care “bundled” into the main procedure code.

In her amended complaint, filed in September 2020, Lee alleged that she alerted hospital leadership that JPS had been improperly adding these modifiers to claims between 70-95 percent of the time, in essence routinely double billing for certain aspects of patients’ care. Nevertheless, she claimed, JPS failed to reimburse payors for overpayment stemming from these improperly coded claims.

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What is the False Claim Act?

The allegations resolved by this settlement were originally filed under the qui tam provisions of the False Claims Act. These provisions permit private persons with evidence of fraud to sue on behalf of the government and to share in any proceeds.

Under the Act, the United States may intervene in such an action or permit the whistleblower to pursue it.  The United States elected not to intervene in the case but did investigate Lee’s allegations. The government then worked collaboratively with the relator and her counsel in their pursuit and resolution of this case.

Lee will receive $912,635 as her statutory share of the settlement proceeds, according to the U.S. Department of Justice.