Sutter Health ordered to pay $13 million fine for health care fraud
SAN FRANCISCO – Sacramento-based Sutter Health, and its affiliate Sutter Bay Hospitals, the successor to Sutter East Bay Hospitals dba Alta Bates Summit Medical Center (collectively Sutter Health), will pay more than $13 million to settle allegations that it violated the False Claims Act. Sutter Health was found to have billed the United States for toxicology screening tests performed by outside labs.
“Sutter Health agreed to pay $13 million to settle allegations that it billed government health programs for lab tests performed by others,” U.S. Attorney Stephanie M. Hinds said. “Government health care programs must be protected, and this office will investigate and pursue health care providers that fail to provide the services paid for by public health care programs.”
The civil settlement agreement signed by Sutter Health that under the terms of a contract which the Sutter Health hospital Alta Bates Summit Medical Center entered into with Navigant Network Alliance, LLC, Navigant referred urine toxicology specimens obtained from physicians and laboratories across the country to Sutter.
Sutter submitted bills, or caused bills to be submitted, for reimbursement of the qualitative and quantitative testing it performed on the specimens. The United States asserts that Sutter did not perform the quantitative testing on thousands of specimens referred under the agreement and that these quantitative tests were instead performed by third-party labs.
It was alleged that Sutter nevertheless sought reimbursement for the tests. In the settlement agreement, the United States contends that between August 1, 2016, and June 30, 2017, Sutter billed for urine toxicology tests it did not perform and was paid for the testing by the Federal Employees Health Benefits Program, Medicare, Medicaid, and Tricare.
Sutter agreed to pay $13,091,452 to settle the false claims allegations. Of that amount, Sutter has already paid more than $6.5 million to the United States.
Sutter agrees to pay the remaining amount of approximately $6.5 million to the United States within 30 days. The settlement agreement resolves the civil law claims that the United States might have brought based upon these allegations.
This matter is being handled by Assistant United States Attorney David DeVito, with assistance from Garland He, Jonathan Birch, Lillian Do, and Alan Lopez. The matter is the result of a coordinated investigation between the U.S. Attorney’s Office for the Northern District of California and the FBI, OPM OIG, HHS-OIG, DCIS, and the DHA.
