- Associated Press - Thursday, June 30, 2016

RENO, Nev. (AP) - The operator of the largest hospital and health care network in northern Nevada has agreed to pay the Justice Department $9.5 million to settle allegations of patient-overcharges and Medicare fraud, U.S. Attorney Daniel Bogden announced Thursday.

The agreement settles a federal whistleblower lawsuit alleging the Reno-based Renown Health submitted false Medicare claims over an eight-year period beginning in 2006.

The civil suit accused Renown Health of billing for inpatient hospital services that should have been charged at less expensive outpatient or observation rates, Bogden said.

The whistleblower who filed the original civil suit in U.S. District Court in Reno in 2012 will receive $1.7 million of the settlement, he said.

“We are committed to cracking down on individuals and organizations which try to defraud Medicare,” Bogden said.

Renown Health operates Renown Regional Medical Center in downtown Reno and the satellite Renown South Meadows Medical Center in south Reno.

Bogden, the U.S. attorney for Nevada, said the case was investigated by the inspector general for the U.S. Department of Health and Human Services. He said the settlement states that it is neither an admission of liability by Renown Health nor a concession by the government that the claims are not well founded.

The nonprofit corporation agreed to settle the suit primarily because of prohibitive litigation costs, said Stacy Kendall, Renown’s director of communications. She said in an email to The Associated Press Thursday night that the civil suit was filed by a former Renown Health employee “regarding technical billing issues surrounding types of patient care.

“These types of lawsuits are becoming increasingly common nationwide,” she wrote.

“After the federal government evaluated the case, they decided not to pursue any action. The plaintiff, however, decided to pursue the case on her own. After careful consideration we made a decision to settle the lawsuit rather than to pursue a lengthy and costly defense,” Kendall said.

The whistleblower, Cecilia Guardiola, is a registered nurse Renown hired as its director of clinical documentation on June 1, 2009, according to federal court records. She was promoted to director of clinical compliance before she said she resigned in January 2012 because her internal attempts to rectify alleged deficiencies in Renown’s billing practices repeatedly were rebuffed.

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