Alchemist Can’t Turn Outpatients Into Inpatients For Less Than $18.3 Million

As a frequent reader of the blog, you know that I strongly believe that the future of hospitals isn’t hospitals, it’s outpatient facilities. (In fact, if you haven’t already, grab a free copy of my 2016 book, The Impending Death of Hospitals, here.)

I’m not sure whether the folks at Banner Health read my book and (1) didn’t believe it, or (2) decided to prove me wrong, but either way it just cost them $18.3 million.

That’s the story revealed by the settlement earlier this month of a whistleblower case brought against Banner by Cecilia Guardiola.

Ms. Guardiola, a registered nurse, worked for Banner as its corporate director of clinical documentation back in 2012. She lasted three months before resigning over what she found to be improper charges to Medicare: billing short-stay, outpatient services that should have been performed on an outpatient basis as if they were more expensive inpatient services. She complained to other executives but they wouldn’t fix the problem.

Eventually, Ms. Guardiola found a pretty good gig as a whistleblower.

Her False Claims Act complaint lists the admission and discharge date/times on 679 cases, each a “zero day” case, many of which she alleged were billed as inpatient even though the patient was admitted to and discharged from the hospital on the same calendar day.

Her case just settled this month, with Banner paying $18.3 million to the government (but not admitting liability). Ms. Guardiola will receive around $3.3 million.

You might say that Ms. Guardiola had a banner day, but that Banner didn’t.

The fact of the matter is that every case that can be performed on an outpatient basis will be performed on an outpatient basis.

And, as Banner discovered, there’s a high price to pay for standing in the way of progress.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss


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