Shands announces settlement agreement, allegations of billing process issues

Investigation discovered neither intentional misconduct nor callous disregard

Shands has agreed to pay $26 million to resolve allegations made under the False Claims Act that billing processes at Shands’ network of hospitals resulted in overpayments by Medicare and Medicaid.

The settlement results from a whistleblower lawsuit filed in the Middle District of Florida Jacksonville Division on April 30, 2008, which was made public this week. The whistleblower had been hired as an independent consultant by Shands in 2006 and 2007 to conduct a routine audit of its billing practices. The audit showed inconsistent billing processes in 2006 and 2007. Allegedly, for some patients, Shands may have billed Medicare and Medicaid for short overnight inpatient admissions rather than for less expensive outpatient or observation services. In each case of alleged overbillings, the patient received all services ordered.

“We hold ourselves accountable for the highest standards of care and service. The case in question does not involve the failure to provide high-quality patient care, but rather inconsistent billing processes,” said Timothy M. Goldfarb, CEO of Shands HealthCare in Gainesville. “We proactively initiated an independent audit that identified some opportunities to improve billing processes at Shands. We took immediate steps to make improvements.”

Shands officials fully cooperated with the state and federal investigation and negotiated the settlement agreement announced today to avoid long and costly litigation. While there has been no admission of liability, Shands HealthCare hospitals in Gainesville and Jacksonville will pay a total of approximately $26 million plus interest: $25.2 million to the United States under the Medicare program and $829,600 to the State of Florida under its Medicaid program.

Shands regularly and proactively conducts audits of its billing practices. It makes constant improvements to remain current with the complicated, evolving health care regulatory environment, which is subject to continued change in policy and guidelines. Shands encourages staff to be active participants in the compliance process and to identify and report potential issues and errors through employee orientation, mandatory annual in-services, year-round communications and promotion of employee compliance hotlines, and other efforts to raise awareness of compliance accountability, Goldfarb added.

Changes made to Shands’ processes and procedures have included:

  • Improvements to case management protocols and utilization review processes with an improved team approach to accurately assess and code the care provided
  • The use of improved software
  • Implementation of new policies and procedures
  • Supplemental employee training
  • The engagement of expert physician advisors who help assess coding and are on staff 24/7

“As a responsible corporate citizen, our intent and practice has always been to comply with government regulations. We have conscientiously worked to create and operate an appropriate, fair and accurate billing system for all payers,” Goldfarb added. “There was no intentional misconduct or callous disregard of these issues on our part.”

About the Author

Melissa Blouin's picture

Melissa Blouin

Director of News and Publications / UF Health, the University of Florida Academic Health Center

Director of News and Publications for UF Health. Before joining UF Health staff in 2012, she was the senior director of academic communications for the University of Arkansas. She has 20 years...Read More