Memorial Hermann To Pay Nearly $2 Million To Resolve Improper Billing Allegations

Federal prosecutors alleged three Memorial Hermann System hospitals billed Medicare for inpatient services that should have been billed as outpatient services, and received larger reimbursements than they were entitled to

The Memorial Hermann Health System agreed to pay the United States over $1.9 million to resolve allegations that it improperly billed government healthcare programs.

U.S. Attorney Ryan K. Patrick, of the Southern District of Texas, made the announcement on Monday.

“Charging the government for higher cost inpatient services when patients only require lower cost outpatient services is a waste of taxpayer money and a violation of trust with the patient and with the government,” said Patrick, in a press release. “This settlement should deter similar conduct in the future and help make health care more affordable.”

Federal prosecutors alleged that between 2009 and 2014, three hospitals in the Memorial Hermann System – the Texas Medical Center, Southwest and Memorial City – billed Medicare for inpatient services that should have been billed as outpatient services. Therefore, the government said, the hospitals received larger reimbursements than they were entitled to.

Below is a statement from Memorial Hermann, provided to Houston Public Media:

“During a routine audit of claims data from 2009-2014, it was discovered that a limited number of records lacked the detailed information necessary under complex billing documentation requirements in regards to physician decisions to admit patients as inpatient versus outpatient. Care provided to patients was appropriate and necessary and there have been no allegations to the contrary. We make every effort to ensure that we have a robust documentation process in place that adheres to our highest standards of accuracy. An agreement has been reached with the U.S. Attorney’s Office to refund the overpayment flagged in the audit dating back to before 2014.  Additionally, we have a longstanding compliance program to ensure that we continuously meet the rigorous documentation standards required in an increasingly complex regulatory environment.”

The Memorial Hermann Health System bills itself as the largest not-for-profit health system in Southeast Texas, and runs and operates 15 hospitals, according to its website.