SAN FRANCISCO – Sutter Health, a Sacramento-based healthcare provider, and its affiliate Sutter Bay Hospitals, successor to Sutter East Bay Hospitals dba Alta Bates Summit Medical Center (collectively, Sutter Health), have agreed to pay more than $13 million to settle allegations that he violated the False Claims Act by billing the United States for toxicology screening tests performed by outside laboratories, United States Attorney Stephanie M. Hinds announced; Federal Bureau of Investigation Special Agent in San Francisco Robert C. Tripp; Office of Personnel Management Office of the Inspector General (OPM OIG) Special Agent in Charge Amy K. Parker; Department of Health and Human Services Office of the Inspector General (HHS-OIG) Special Agent in Charge Stephen J. Ryan; Department of Defense Office of the Inspector General, Defense Criminal Investigation Service (DCIS) Special Agent in Charge of the Western Office Brian D. Denny; and the Defense Health Agency (DHA).
“Sutter Health has agreed to pay $13 million to settle allegations that it billed government health programs for laboratory tests performed by others,” said U.S. Attorney Stephanie M. Hinds. “Government health care programs must be protected, and this office will investigate and prosecute health care providers who fail to provide the services paid for by public health care programs.”
“Investigating health care fraud and abuse is a priority for the FBI,” said FBI San Francisco Special Agent in Charge Robert C. Tripp. “These cases are often worked in conjunction with our federal law enforcement partners, and this settlement is a great example of the hard work of the interagency investigative team to protect the integrity of the federal employee health benefits program.”
“OPM OIG is committed to protecting the Federal Employees Health Benefits Program from fraudulent claims,” said OPM OIG Special Agent in Charge Amy K. Parker. “I applaud the dedicated team for their efforts to secure today’s settlement.”
“When health care providers bill federal health care programs for services that other providers actually performed, the integrity of those programs is undermined,” said HHS-OIG Special Agent in Charge Stephen J. Ryan. “Working with our law enforcement partners, we will continue to root out and investigate such schemes.”
“Today’s announced outcome concludes a collaborative effort to hold Sutter Health accountable for its improper billing practices that have harmed our health care system, including the Department of Defense’s TRICARE program,” said DCIS Western Field Office Special Agent in Charge Brian D. Denny . “DCIS will continue to work closely with our law enforcement partners to protect the integrity of the health care system.”
“We commend the Department of Justice, the US Attorney’s Office and other state and federal agencies for their commitment to justice,” the Defense Health Agency said. “Their efforts protect taxpayer dollars to ensure our service members, veterans and their families continue to receive the highest level of medical care.”
The United States alleges in the civil settlement agreement signed by Sutter Health that under the terms of a contract Sutter Health Alta Bates Summit Medical Center entered into with Navigant Network Alliance, LLC, Navigant forwarded urine toxicology samples obtained from physicians and laboratories from all over the country to Sutter. Sutter submitted bills, or caused bills to be submitted, to reimburse him for the qualitative and quantitative tests he performed on the specimens. The United States claims that Sutter did not perform the quantitative tests on thousands of specimens specified in the settlement and that those quantitative tests were instead performed by third-party laboratories. The United States claims that Sutter nevertheless sought reimbursement for the tests. In the settlement agreement, the United States alleges that between August 1, 2016 and June 30, 2017, Sutter billed for urine toxicology tests he did not perform and was paid for the testing by the Federal Employees Health Benefits Program, Medicare , Medicaid, and Tricare.
Sutter agrees in the settlement agreement to pay $13,091,452 to settle the false claims. Of that amount, Sutter has already paid over $6.5 million to the US. Sutter agreed to pay the remaining amount of approximately $6.5 million to the United States within 30 days. The settlement agreement resolves civil claims the United States may have brought based on these allegations.
This matter is being prosecuted by Assistant United States Attorney David DeVito with the assistance of Garland He, Jonathan Burch, Lillian Doe and Alan Lopez. The matter is the result of a coordinated investigation between the US Attorney’s Office for the Northern District of California and the FBI, OPM OIG, HHS-OIG, DCIS, and DHA.
The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The civil settlement agreement is neither an admission of liability by Sutter Health nor an admission by the United States that its claims are not well founded.