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St. John's closes clinics after claims investigation

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St. Louis-based Mercy Health System, parent company of St. John’s Regional Health System in Springfield, has paid more than $2.2 million to the federal government following an investigation into its Medicare and Medicaid claims by the U.S. Department of Health and Human Services.

St. John’s was accused of filing uncovered Medicare claims between Jan. 1, 2005, and March 31, 2010, for debridement and trimming of Medicare and Medicaid beneficiaries’ toenails at foot clinics in Mountain View, Lebanon, Springfield, Aurora and Cassville, according to the settlement. Cora Scott, media relations director for St. John’s hospital in Springfield, said St. John’s decided to close the foot clinics as a result of the settlement.

Mercy Health agreed to pay $2,225,000 to the U.S. Attorney’s Office in the Eastern District of Missouri within three days of the settlement, which was signed by Assistant U.S. Attorney Suzanne J. Moore, on Nov. 30.

“The government took the position that many of the services provided at the foot clinics were not covered services under technical Medicare and Medicaid coverage rules, and therefore were not reimbursable by Medicare and Medicaid,” St. John’s officials said in a statement. “No allegations were made by the government that the services billed were not provided, that the services were of inadequate quality or that the services provided were not needed by the patients.”

Scott said hospital officials have been working with the Centers for Medicare and Medicaid Services for 10 years and had passed its inspection of multiple independent audits during that time. Only in the last year did the hospital find there were any problems with its claims procedures, Scott said.

A couple of years ago, the agency made adjustments to its procedures that Scott said the health system followed.

“Sometime in the last year, they came back and said, ‘Actually, none of these services are reimbursable,’” Scott said.

As part of the agreement with St. John’s, no administrative action would be sought for the nonreimbursable claims. Calls to the Centers for Medicare & Medicaid Services in Baltimore and the Kansas City regional office of the Department of Health & Human Services were not returned by press time.

“We are a pretty transparent organization, and we fully cooperated with the investigation,” Scott said, adding that other hospitals across the country are now facing similar issues with regard to their Medicare and Medicaid claims.

CoxHealth agreed to pay a $60 million settlement to the federal government in July 2008 to resolve allegations of improper Medicare billing. According to Stacy Fender, media relations coordinator for CoxHealth, the billing regulations can be hard to navigate.

“Medicare billing regulations are highly complex, and health care organizations all across the country are challenged to navigate these regulations,” Fender said via e-mail. “CoxHealth and St. John’s are among other well-respected health care institutions such as the Mayo Clinic, Cleveland Clinic and Johns Hopkins that have been subject to similar types of government investigations and settlements.”

Springfield Business Journal reported in 2008 that as part of the settlement, Cox agreed to pay $35 million up front and five annual $5 million payments with 4 percent annual interest.

Missouri Attorney General Chris Koster said Dec. 7 that a Springfield-based licensed professional counselor was charged with four felony counts of Medicaid fraud, one count of obstruction, and one count of stealing by deceit. 

Joshua Johnmeyer, 34, was charged with submitting false claims for payment to Medicaid for counseling services he did not perform and for supplying the Attorney General’s Medicaid Fraud Control Unit with false patient records with the intention to defraud the state.

Johnmeyer is accused of filing false claims with the state for more than $3,600 between January and September 2009.

The National Health Care Anti-Fraud Association estimates that $60 billion per year, or 3 percent of total federal health care spending, is lost to fraud.
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