Grenada Lake Medical Center to Pay More Than $.1.1 Million to Resolve False Claims Act Allegations Involving Medically Unnecessary Psychotherapy Services
The Justice Department announced today that Grenada Lakes Medical Center (GLMC), a publicly-owned hospital which at various times has been operated by the University of Mississippi Medical Center and by the Grenada Lake Medical Center Board of Trustees, has agreed to pay more than $1.1 million to resolve False Claims Act allegations that the hospital sought and received reimbursement from Medicare for services that were not medically reasonable or necessary.
The settlement resolves allegations that, beginning in January 2005 and continuing until April 2013, the hospital submitted claims for Intensive Outpatient Psychotherapy (IOP) services that did not qualify for Medicare reimbursement. The IOP services in question were performed on GLMC’s behalf by Allegiance Health Management (Allegiance), a post-acute healthcare management company based in Shreveport, Louisiana, but billed to Medicare by GLMC directly.
“Hospitals that participate in the Medicare program are responsible for ensuring that the services performed at their facilities or on their behalf reflect the medical needs of patients rather than the desire to maximize profit,” said Acting Assistant Attorney General Chad A. Readler for the Civil Division. “The Department of Justice will continue to hold accountable those who misspend taxpayer funds by providing medically inappropriate services.”
Today’s settlement with GLMC follows a recent settlement with Allegiance, as well as previous settlements with more than twenty other hospitals where Allegiance provided IOP services.
“We will not tolerate hospitals that place profit over legitimate patient care by billing for medically unnecessary services,” said C.J. Porter, Special Agent in Charge for the U.S. Department of Health and Human Services Office of Inspector General. “In coordination with our partners, we will continue to investigate these cases and ensure taxpayer funds are used as intended.”
The settlement with GLMC resolves certain allegations in a lawsuit filed in the Eastern District of Arkansas under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The lawsuit was filed by Ryan Ladner, who formerly worked for Allegiance as a Program Manager at the Inspirations Outpatient Counseling Center located at Wesley Medical Center in Hattiesburg, Mississippi. Mr. Ladner will receive approximately $195,000 as his share of the GLMC settlement.
This, and prior settlements in this matter, were the result of a coordinated effort by the Civil Division of the Department of Justice, the United States Attorney’s Office for the Eastern District of Arkansas, and the Department of Health and Human Services, Office of Audit Services and Office of Inspector General.
The claims settled by the current agreement are allegations only, and there has been no determination of liability. The lawsuit is captioned U.S. ex rel Ladner v. Allegiance Health Management, Inc., et al, No. 4:10-CV-170 (E.D. Ark.).
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Our History
The original Grenada Hospital was founded in October 1923, in the old Broadstreet home on College Street by Dr. F.S. Hill and Dr. J.K. Avent. Property on Mound Street was later acquired and, in February 1927, Grenada Hospital moved to that location with a new brick building with a capacity of 50 beds. This hospital was enlarged in 1946, 1957, and 1962, and had an ultimate capacity of 75 beds. In 1966, the hospital was reduced to 47 beds and was listed as an all private room hospital.The Grenada Hospital was purchased in January 1965, by Grenada County and operated on Mound Street as Grenada County Hospital until November 15, 1967. The new Grenada County Hospital, in its present location, was opened November 15, 1967, with a capacity of 96 beds.On May 12, 1969, the hospital's Holmes Junior College sponsored Licensed Practical Nurse School was started.
The Grenada County Ambulance Service became a part of the hospital on April 1, 1977. It was then necessary to enlarge the emergency room area to include an emergency waiting room and space to accommodate the emergency medical technicians.
Ground was broken in 2007 for a $22 million expansion and on April 14, 2009, a grand opening ceremony was held to celebrate the completed expansion. Expansion and renovations included the following:
- The Ambulatory Care Unit was expanded from 11-beds to 18-beds.
- The newly-constructed West Wing houses two units, one is the new state-of-the-art Critical Care Unit (CCU) on the third floor, which was expanded from 5-beds to 9-beds. The other new unit on the West Wing is the new Women's Pavilion on the second floor which has expanded from 12 beds to 23 beds. The spacious new state-of-the-art patient care rooms on this unit are as impressive as the new CCU rooms. In addition, floors 2, 3, and 4 were designed with spacious and attractive patient rooms.