MINNESOTA HEALTH CARE CHAIN TO PAY U.S. $16 MILLION
TO SETTLE HEALTH CARE FRAUD ALLEGATIONS

WASHINGTON, D.C. – Allina Health System will pay the United States $16 million to resolve allegations that the Minneapolis, Minnesota-based company fraudulently overbilled three government health care programs – Medicare, Medicaid, and the military health care programs, TRICARE/CHAMPUS, the Justice Department and the United States Attorney's Office for the District of Minnesota announced today. Also as part of the settlement, Allina has entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services and will be required to ensure continuing compliance with Medicare program requirements.

The settlement resolves the government's contention that Allina's hospitals and clinics violated the False Claims Act in certain respects between 1994 and 2001, including knowingly seeking reimbursement through a variety of improper billing methods, such as duplicate billing and upcoding, billing for a more highly reimbursed service or product than the one provided. The settlement also resolves three whistleblower lawsuits that were filed against Allina. These suits contained an allegation that Allina knowingly retained overpayments after the company's own audits demonstrated that it had submitted erroneous claims. Although Allina repaid the specific claims identified as erroneous in the audits, according to the lawsuits, it did nothing to ensure that other false claims were repaid, nor did the health care firm take sufficient steps to ensure the accuracy of its billings going forward.

"Today's settlement demonstrates our continuing commitment to pursue vigorously allegations of fraud and abuse in Medicare and other government health care programs," said Robert McCallum, Assistant Attorney General for the Civil Division of the Department of Justice. "Health care providers can and will be held accountable for their billing practices. This settlement demonstrates our unwavering pursuit of fraud and abuse."

Allina is an integrated health-care provider that operates more than 10 hospitals, 50 clinics, a medical equipment supplier, a medical transportation service provider, as well as several nursing homes, hospices, and other related providers throughout Minnesota. Until the Summer of 2001, Allina also operated Medica, a health insurance plan.

"Health care providers and the government share a common goal: providing the highest quality health care to the people we serve," said U.S. Attorney Tom Heffelfinger. "The agreement between Allina , the United States Government and the State of Minnesota is an important step toward achieving that end. The resolution of this matter will permit an important provider of health care to return to its primary mission. I applaud the efforts of all concerned in coming to this agreement."

The case was jointly handled by the United States Attorney's Office in Minneapolis, Minnesota, through Assistant United States Attorney Gerald Wilhelm, and the Justice Department's Civil Division, in collaboration with the Office of the Inspector General of the Department of Health and Human Services. The Minnesota Medicaid Fraud Control Unit also participated in the case.

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