Coordinated Health and CEO Settle Allegations for $12.5 M

Coordinated Health and its CEO have agreed to pay a total of $12.5 million to settle allegations that they submitted false claims to Medicare and other federal health care programs.

Coordinated Health is a Lehigh Valley, Pennsylvania, hospital and health system that employs about 100 physicians. Thirty of those physicians are board-certified orthopedic surgeons.

The government claims that Coordinated Health exploited a loophole that allowed it to double bill federal healthcare payers for surgeries and that the company ignored the coding consultants who advised that the company was improperly billing.

The government alleges that from 2007 to 2014, Coordinated Health misused a billing code to enable it to improperly unbundle its orthopedic surgery claims. These practices resulted in Coordinated Health being overpaid millions by federal healthcare payers. Top Coordinated Health executives were warned at least two times by outside coding consultants that it had been improperly unbundling many of its orthopedic surgeries but chose to ignore the recommendations.

U.S. Attorney William M. McSwain announced, “The alleged corporate culture and leadership that promoted this conduct and allowed it to continue despite crystal clear warnings is shameful…If true, it amounts to theft of public funds and a fraud on Medicare, Medicaid, and federal employee health insurers. We are unaware of any unbundling scheme that has had a bigger impact on federal funds. My Office will continue to hold businesses and individuals accountable for this type of wrongdoing.”

Coordinated Health has agreed to pay $11.25 million and Emil DiIorio, M.D., Coordinated Health’s founder, principal owner and CEO, has agreed to pay $1.25 million personally. Coordinated Health has also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services, that will require the health network’s billing practices to be monitored for five years.