UCHealth settles federal fraud case for $23M after accusations of fraudulent emergency room billing
The University of Colorado Health has settled a federal fraud case with the U.S. Department of Justice for $23 million after UCHealth was accused of fraudulently billing Medicare and TRICARE for emergency care.
The nonprofit hospital system -- which serves much of the state, as well as parts of Wyoming and Nebraska -- did not admit guilt in the settlement or in a statement to CBS News Colorado.
"UCHealth is pleased to see the end of this lengthy and resource-intensive investigation," that statement read. "UCHealth denies these allegations, but we agreed to the settlement to avoid potentially lengthy and costly litigation. The settlement allows us to focus our resources on providing excellent patient care."
The case was originally filed in 2021 in U.S. District Court for the District of Colorado. It was brought about by a whistleblower, Timothy Sanders, who worked as a revenue recovery auditor for UCHealth, dealing with complaints from patients who felt they were overcharged. He says UCHealth's automated billing system was overcharging people and that several people on his team, as well as the chief financial officer at the time, knew about it.
Sanders will receive $3.91 million of the proceeds as part of the settlement. Through his attorney, Sanders declined to speak with CBS Colorado about the case.
In a two-month period, Sanders says he resolved 64 cases from patients who were billed as level 5 emergency room visits. Seven were bumped down to a level 2 visit, 29 were changed to a level 3 and 28 were reduced to level 4.
The American College of Emergency Physicians describes emergency room visit levels with the following potential examples:
- Insect bite (uncomplicated), read Tb test
- Localized skin rash, lesion, sunburn, minor viral infection, painless eye discharges, or ear pain
- Minor trauma with potential complicating factors, medical conditions requiring prescription drug management or head injury
- Blunt/penetrating trauma with limited diagnostic testing, headache with nausea/vomiting, or dehydration requiring treatment
- Blunt/penetrating trauma requiring multiple diagnostic tests, systemic multi-system medical emergency requiring multiple diagnostics, severe headache or chest pain--multiple diagnostic tests/treatments
The complaint against UCHealth alleged that UCHealth knew its automatic coding rule didn't satisfy the requirements for Medicare and TRICARE billing, "because it did not reasonably reflect the facility resources used by the UCHealth hospitals," the Department of Justice said.
"Fraudulent billing by health care companies undermines Medicare and other federal health care programs that are vital to many Coloradans," Matt Kirsch, acting U.S. attorney for the District of Colorado said in a statement. "We will hold accountable health care companies who adopt automatic coding practices that lead to unnecessary and improper billing."