JPS Hospital in Fort Worth to pay more than $3 million to settle whistleblower lawsuit

Tarrant County’s John Peter Smith Hospital has agreed to pay more than $3.3 million to settle allegations that it violated the False Claims Act by upcoding certain claims submitted to federal healthcare programs, according to a Friday news release from Acting U.S. Attorney Prerak Shah of the Northern District of Texas.

The settlement resolves a whistleblower lawsuit filed in 2018 by Erma Lee, JPS’s former director of compliance. Lee’s complaint said the hospital improperly added billing modifiers to hundreds of claims to obtain payments to which it wasn’t entitled.

When used properly, the billing modifiers indicate that a provider administered significant care on the same day as another medical procedure that was above and beyond the preoperative and postoperative care “bundled” into the main procedure code, the U.S. Attorney’s Office said in the release.

In an amended complaint filed in September, Lee alleged that she alerted hospital leadership that JPS had been improperly adding modifiers to claims between 70 percent and 95 percent of the time, in essence routinely double billing for certain aspects of patients’ care, the release said. Lee said JPS failed to reimburse the federal healthcare programs for the overpayments.

“When company executives ignored this whistleblower’s concerns about improper billing, she took them to the court,” Shah said in the release. “We are proud of the citizens who speak out to protect our federal healthcare programs.”

The allegations were originally filed under the qui tam provisions of the False Claims Act, which allows private citizens with evidence of fraud to sue on behalf of the government and to share in any proceeds, the U.S. Attorney’s Office said.

The United States may choose to intervene in such a case or permit the whistleblower to pursue it. Although the federal government decided not to intervene in this case, it investigated Lee’s allegations and worked collaboratively with her and her attorney, the release said.

Lee will receive $912,635 as her share of the settlement proceeds.

The hospital did not immediately respond to a request for comment Friday.

This story was originally published August 27, 2021 at 4:40 PM.