Sparrow to pay $671K to settle civil claim it overbilled for some medical services

LANSING — Sparrow Health System has agreed to pay more than $671,000 to resolve a civil claim that it improperly billed federal health care programs for services done by a physician when they were actually provided by "mid-level providers," the U.S. Attorney's Office said.

The health system cooperated with the investigation and undertook an internal audit based on allegations it violated the False Claims Act by misusing "incident-to" billing, federal officials said.

That process allows nurse practitioners, physician assistants or other providers to bill for services under a physician’s name and reimbursement rate if certain criteria are met, the government said in a news release. Otherwise, the services must be billed at a lower rate.

“Truthful and accurate billing is crucial to our Medicare system,” U.S. Attorney Mark Totten said in the release.

“Improper billing in our federal health care programs wastes valuable taxpayer funds that are set aside to care for the wellbeing of those most in need,” Mario Pinto, special agent in charge of the U.S. Department of Health and Human Services, Office of Inspector General, in Chicago, said in the news release.

Sparrow officials said the allegations involved billing for Medicare and Medicaid and did not directly affect patient care.

"Leaders from Sparrow Health System cooperated fully with all regulatory agencies involved in this complaint," spokesperson John Foren said in a statement. "We appreciate the opportunity to correct the billing concerns cited and are committed to examining our processes to avoid future issues."

The government said the settlement resolves claims brought under the "qui tam" or whistleblowers provisions of the False Claims Act. That process allows a private party to sue a wrongdoer on behalf of the government and receive part of a monetary settlement if the government wins one.

The qui tam case is titled "U.S. ex rel. Patricia M. Crowe, M.D. v. Sparrow Medical Group, et al.," the government said.

The total amount of the settlement is $671,310, officials said.

Contact Ken Palmer at kpalmer@lsj.com. Follow him on Twitter @KBPalm_lsj.

This article originally appeared on Lansing State Journal: Sparrow Health System settles civil claim over billing practices