November 08, 2013
The effectiveness of the whistleblower reward program under the California Department of Insurance was demonstrated earlier this week when Sutter Health agreed to a $46 million settlement in a case alleging false and misleading surgery bills.
The whistleblower case was brought by Rockville Recovery Associates in 2009, and the insurance commissioner joined the case in 2011. The qui tam case was filed under the California Insurance Frauds Prevention Act, which is similar to state and federal whistleblower programs.
Sutter allegedly charged up to $5,000 for anesthesia services, on top of a separate anesthesiologist fee. The hospital operator was accused of charging this anesthesia fee even when no anesthesia services were used in the procedure.
In addition to paying the state $46 million, Sutter has also agreed to bill anesthesia services on a flat-rate system rather than hourly, “describe every component of its anesthesia billing, post…the cost [of] anesthesia services, clarify…the bills that consumers and insurers receive, and more readily permit insurers and other payers to contest Sutter’s bills.”
Insurance Commissioner Dave Jones calls this settlement a “groundbreaking step in opening up hospital billing to public scrutiny.”