Lee Health pays $12.7 million to resolve self-reported claims violations with federal government

The publicly operated Lee Health is paying $12.7 million to the federal government to resolve allegations that it submitted claims for pain management services that did not meet criteria for reimbursement, according to authorities.

Lee Health, the largest hospital operator in Lee County, came forward to the U.S. Department of Health and Human Services through the agency’s voluntary “self disclosure” program to report evidence of potential fraud, according to a Feb. 28 federal enforcement action.

The alleged violations for claims payments under the Civil Monetary Penalties Law that Lee Health reported occurred from 2011 to 2018, according to the hospital system.

“There are no financial impacts to patients associated with this matter,” Lee Health spokeswoman Mary Briggs said in a statement.

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Investigation alleges fraud occurred at Lee Health and Cape Coral hospitals

An investigation by the federal agency’s Office of Inspector General alleges the fraud occurred at Lee Health and Cape Coral Hospital facilities, where claims were submitted for services performed by two independent contractor physicians that did not meet coverage criteria.

The services were for “certain professional and technical pain management procedures” but the federal agency does not specify what types of pain management services were involved.

Briggs said the agreement to pay the $12.7 million “is the result of proactive monitoring by Lee Health” that led to an amicable resolution of the matter through the government’s self-disclosure program.

“Through routine auditing Lee Health identified potential documentation errors in some pain management procedures during the 2011-2018 time period and self-reported them to the (federal government),” she said.

“Acting as a good corporate citizen, Lee Health initiated the proceedings and cooperated with the (government) throughout the inquiry,” she said.

The hospital system, which has an operating budget of $2.5 billion this year, had 89,000 admissions in 2021 and its average daily census was 1,482 patients, according to its financial reports.

Lee Health operates four acute care hospitals with a combined 1,865 beds. They are Lee Memorial Hospital, Gulf Coast Medical Center, HealthPark Medical Center, and Cape Coral Hospital. The system also operates the 134-bed Golisano Children’s Hospital which serves children through Southwest Florida.

The Office of the Inspector General with the HHS has not disclosed the names of the two physicians involved, Briggs said.

“They are no longer under contract with Lee Health,” she said.

What is the self-disclosure program?

The self-disclosure program allows healthcare organizations, such as hospitals and suppliers, to voluntarily come forward with “self discovered evidence of fraud” in the Medicare and Medicaid programs, according to the HHS website. The program was established in 1998.

“It allows these companies to avoid the costs associated with a government-directed investigation,” according to HHS.

Briggs said Lee Health has a rigorous compliance program that monitors and audits the health system’s clinical and business operations to make sure the health system follows health care statutes and regulations.

“As soon as our compliance department brought this matter to our attention, we took action to report it to the OIG, which has resulted in providing appropriate reimbursement to the government,” she said.

The self-disclosure program of the inspector general’s office is one avenue for how the federal government handles fraud investigations and recovers taxpayer dollars.

For 2021, the agency reported 532 criminal enforcement actions and 689 civil actions and a total recovery of nearly $4 billion, according to a Dec. 2 report.

A breakdown shows $787 million is expected be returned based on audit findings and $3 billion is expected to be recovered based on investigations, the report shows.

This article originally appeared on Fort Myers News-Press: Lee Health agrees to pay $12.7 million to resolve fraud allegations