B2B Payments

Health Network Set To Pay $35 Million For Overbilling Medicare

Carondelet Health Network has agreed to pay $35 million to settle charges that it improperly billed the Medicare program between 2004 and 2011, according to aU.S. Attorney’s Office press release.

The Tucson, Ariz.-based organization conducted business as Carondelet St. Mary’s Hospital and Carondelet St. Joseph’s Hospital. According to the statement, the hospitals violated the federal False Claims Act by submitting false bills to Medicare and other federal health care programs.

“This settlement is the largest-ever False Claims Act recovery in Arizona, and it reflects the longstanding and ongoing efforts of our office to guard the vital but limited funding of federal health care programs,” United States Attorney John S. Leonardo said. “Inpatient rehabilitation services are very costly to taxpayers, and it is critical that these federal dollars be reserved only for those qualified patients who need the intense rehabilitation therapy services provided in an inpatient setting.”

From April 7, 2004, through Dec. 31, 2011, the two hospitals billed Medicare, the Federal Employees Health Benefit Program and the Arizona Health Care Cost Containment System (Arizona’s Medicaid agency) for inpatient rehabilitation facility services, according to the allegations. However, the services were not properly reimbursable under applicable coverage criteria.


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