Probing The Medicare Money Trail

The feds widen their crackdown on Medicare overbilling

The letter from the Justice Dept. shocked President James W. Varnum of Mary Hitchcock Memorial Hospital. Alleging that his Lebanon (N.H.) hospital committed fraud in the way it billed Medicare in the early 1990s, the feds demanded $1 million in their January letter, mostly in civil fraud penalties. Varnum says that the overpayments resulted from a mistake-prone billing system. Still, in May, rather than litigate, he settled with Justice by paying $100,000. "Whenever there is any error, the government says it's fraud and abuse," Varnum fumes. "It's not right."

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