Coffey Health to pay $250K in False Claims Act settlement

A 25-bed critical access hospital in Burlington, Kan., allegedly submitted false claims regarding security risks to electronic health records under the Medicare and Medicaid EHR Incentive Program.

Coffey Health System has agreed to pay the federal government $250,000 to settle claims that it violated the False Claims Act by falsely attesting that it conducted or reviewed security risk analyses for the reporting periods of 2012 and 2013.

“Medicare and Medicaid beneficiaries expect that providers ensure the accuracy and security of their electronic health records,” said United States Attorney Stephen McAllister in a written statement. “This office remains committed to protecting the federal health programs and to hold accountable those whose conduct results in improper payments.”

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The case was investigated by the U.S. Attorney’s Office for the District of Kansas and the Department of Health and Human Services’ Office of the Inspector General.

“Providers who fail to properly ensure the security of electronic health records must be held accountable,” says Steve Hanson, special agent in charge with HHS OIG’s Kansas City Region.

At the same time, the Department of Justice’s announcement made it clear that the claims resolved by the settlement with Coffey Health are “allegations only” and that “there has been no determination of liability.”

The allegations were brought to light through a whistleblower lawsuit filed by Bashar Awad and Cynthia McKerrigan in the United States District Court for the District of Kansas. Under the whistleblower provisions of the False Claims Act, private individuals are permitted to sue on behalf of the government for false claims and to share in any recovery.

As a result of their lawsuit, Awad and McKerrigan will receive about $50,000.