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LINCOLN - A Lincoln hospital has paid $1.34 million to the U.S. government to settle allegations of improper billing for Medicare claims.

Abraham Lincoln Memorial Hospital reached the civil settlement that stems from an investigation of the hospital's treatment of Medicare patients with three specific ailments from 2000 to 2002. The patients were diagnosed with gram negative pneumonia, septicemia and acute renal failure.

According to the U.S. Attorney's Office in Springfield, the hospital filed the false claims on the advice of an outside consultant using diagnostic codes not supported by the patients' medical records.

"This caused Abraham Lincoln Memorial Hospital to receive a significantly higher reimbursement from Medicare than it would have otherwise received," said a statement released Thursday by Rodger A. Heaton, the U.S. attorney handling the case for the Central District of Illinois.

As part of the agreement, the hospital has entered into a three-year corporate integrity agreement with the U.S. Department of Health and Human Services. The hospital is required to maintain its compliance plan and provide information to the federal agency about that compliance.

In a statement Thursday, Woody Hester, chief executive officer of the hospital, said "we are pleased to be able to resolve this matter. All of the cases reviewed by the government involved billings that were based on coding and documentation advice we received from an outside consultant."

The settlement involves no admissions or findings of wrongdoing on the part of the hospital or its staff, said Hester. The hospital official added that "to the extent that our reliance on that consultant caused us to submit claims that were not supported by the medical records and the applicable coding rules, we accept responsibility for this deviation from our own high standards and commitment to excellence in compliance with Medicare billing."

In a statement from the hospital to its staff, Hester said "we have adopted additional controls to make sure that independent consultants we select in the future provide accurate and appropriate advice."

The investigation did not involve or reveal problems with the quality of care provided to patients, said the government statement.

Lincoln hospital officials cooperated with investigators throughout the probe into Medicare claims, according to Heaton's office. The investigation and negotiations were handled by staff of the U.S. Attorney's Office, U.S. Department of Health and Human Services and the Illinois State Police.

The Lincoln hospital case is the fourth settlement in three years arising from an investigation of hospital claims under the federal False Claims Act by the U.S. Attorney's Office, said Heaton. Overpayments and penalties of about $5 million have been recovered through the settlements.


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