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Insurance company demands TX hospital return $1 million

Navigating the intricacies of insurance payments is difficult, even for hospital officials. One local hospital is attempting to figure out what went wrong that led to an insurance company accusing the hospital of fraudulent billing practices.

Practices elaborated: Was a fraudulent scheme in the works? The insurance company has accused the hospital of partaking in a “questionable pass-through billing operation,” according to a recent publication in the Mineral Wells Index. Essentially, the hospital billed for services it did not conduct. As such, the insurance company has accused the hospital of fraudulent billing practices.

Hospital officials accused the previous CEO of awareness of the billing practice and terminated his position in July. The officials stated the termination as the result of a “breach of his employment agreement, violation of hospital core values and policies, including the policy regarding board approval of certain contracts, breach of fiduciary duty and the lack of transparency and candor with the board regarding the allergy and DNA lab testing service line.”

Billing in actuality: How much did the insurance company pay? Cases like this often involve federal investigations. In this case, the Federal Bureau of Investigation (FBI) investigated and stated the hospital had billed for allergy and DNA testing that was not done at the hospital. The hospital allegedly billed $55 million and received $8.7 million in payments before officials put an end to the billing practice. The insurance company has demanded a return of $954,000.

The hospital and its board of directors have cooperated with the FBI during the investigation. The hospital has set aside approximately $2 million to deal with requests for reimbursement such as this. An official with the hospital has stated it will consider the request but requires documented proof of billing, services and payments from the insurance company.