Aurora-based health system University of Colorado Health has agreed to pay $23 million to settle allegations that it used automated coding for emergency department visits to fraudulently bill a pair of federal programs, Medicare and TRICARE.

“Incorrect billing of federal health care programs consumes valuable government resources needed to provide health care to millions of Americans,” said Senior Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, in a news release Tuesday. “We will go after healthcare providers who defraud taxpayers by knowingly submitting inflated or unsubstantiated claims.”

As part of the settlement, a whistleblower named Timothy Sanders will receive $3.91 million in the proceeds of the civil action.

His attorney, Michael S. Porter, did not respond to a request for comment by CPR’s deadline.

The settled claims are allegations only, the statement said, and “there has been no determination of liability.”

“UCHealth is pleased to see the end of this lengthy and resource-intensive investigation,” Dan Weaver, UCHealth’s vice president of communications, said in an email. “UCHealth denies these allegations, but we agreed to the settlement to avoid potentially lengthy and expensive litigation. The agreement allows us to focus our resources on providing excellent patient care.”

The case involved a variety of government legal teams, including the Department of Justice’s Civil Division (Commercial Litigation Branch) and Fraud Section, as well as the U.S. Attorney’s Office for the District of Colorado, with assistance from the Office of Health and Human Services of the Inspector General and The Defense Criminal Investigation Service, according to the release.

“Fraudulent billing by health care companies undermines Medicare and other federal health care programs that are vital to many Coloradoans,” said Matt Kirsch, Acting U.S. Attorney for Colorado. “We will hold accountable health care companies that adopt automated coding practices that lead to unnecessary and improper billing.”

Medicare is a federal health insurance program for people over age 65 and some people under that age with certain disabilities or conditions. The TRICARE program is for US military service members and their families.

When a patient visits a medical facility, including an emergency department, they submit requests for E&M, evaluation, and management using billing codes. When submitting them to Medicare or TRICARE, depending on the level of resources used, a hospital can enter one of five codes, one of which represents a higher level of care and therefore expense.

The allegations span from November 2017 to March 2021.

The government alleged that UCHealth hospitals automatically coded claims for emergency room visits using the higher level of care code “whenever its health care providers checked a patient’s set of vital signs more than the total number of hours in which patient was present in the emergency department. ,” except for patients who were in the emergency department for less than an hour, according to the release.

This occurred despite the severity of the patient’s medical condition or the hospital’s resources used to manage the patient’s health and treatment.

UCHealth knew that automated coding based on vital sign monitoring “did not meet the requirements for billing to Medicare and TRICARE because it did not reasonably reflect the facility resources used by UCHealth hospitals,” the statement said.

UCHealth received “numerous complaints” from its coding employees, according to the settlement agreement, warning about using the more expensive code based on the automatic coding rule associated with “frequent monitoring of vital signs.”

It also received and responded to complaints from individual patients, “but did not adjust its automatic coding rule systemically.”

The practice has also been flagged by a federal agency. “UCHealth has been consistently identified in reports from the Centers for Medicare and Medicaid Services as a ‘Last Abnormal'” for high-level care code billing over that nearly four-year period.

In April 2021, Sanders filed a private suit in federal court against UCHealth under the qui tam notice provisions of the False Claims Act.

“Health care providers participating in federal health care programs such as Medicare must comply with laws designed to preserve the integrity of program funds, including requiring providers to submit only adequate and accurate claims for reimbursement,” said Special Agent in Charge Linda T. Hanley of the Office of Inspector General of the Department of Health and Human Services, in the release.

The case and its resolution “illustrate the government’s focus on combating health care fraud,” according to the statement. She noted that the False Claims Act is one of the effort’s most powerful tools.

DOJ’s Health Care Fraud Unit he charged more than 5,400 defendants of fraudulently billing Medicare, Medicaid and private health insurers more than $27 billion since 2007, according to the agency’s public affairs office.

Tips and complaints of potential fraud, waste, abuse, and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477).