Hospital Overcharging Included $2,500 Billed for Individual Surgical Screws

Houston, TXIt isn’t often that emergency room charges and hospital overcharging are used in the same sentence with words such as “racketeer” and “corrupt.” However, such allegations are included as part of claims brought against Houston-based North Cypress Medical Center by Aetna Life Insurance Co. At issue are allegations that due to allegedly deceptive practices, Aetna overpaid the hospital as much as $120 million.

At the center of the dispute medical bill case is Dr. Robert A. Behar, identified in court records as the CEO of North Cypress. According to court documents, physicians were offered ownership interest in North Cypress in exchange for recommendations and patient referrals to North Cypress over less-expensive, in-network facilities.

In a move that takes the issue of emergency room cost and other hospital billing disputes to a new level, North Cypress is alleged to have consistently billed Aetna for procedures that were charged at a much higher cost than similar hospitals.

As an example, it is alleged that Aetna was billed for $3.1 million for surgical anchor screws at a rate exceeding $2,500 for each screw. It is alleged that North Cypress utilized non-specific billing codes. It is also alleged that North Cypress purposely provided incorrect codes for services and procedures undertaken in various sectors of the hospital - including the emergency room - resulting in significantly higher emergency room cost.

Combined, North Cypress is alleged to have increased its gross revenues by hundreds of millions of dollars above the revenues of comparable hospitals. Doctors who consistently referred patients to North Cypress are described as having the potential to become “millionaires virtually overnight” through the acquisition of an ownership stake in the hospital as incentive. Doctors failing to refer a sufficient number of patients were reprimanded and threatened, or forced to relinquish their ownership stakes in the hospital, or so it was alleged.

Hospitals will often overcharge patients with adequate health coverage or resources to pay out-of-pocket, in order to compensate for losses incurred when treating patients who lack adequate coverage or resources. Many hospitals, however, go overboard and have been known to charge exorbitant emergency room fees and costs for other procedures. Behar and North Cypress are accused of concocting the scheme in an effort to upgrade the facility to “an upscale 5-star hotel-like ambience,” according to the complaint.

“Dr. Behar intended to harm Aetna as part of his greed and personal vendetta against the managed care industry and, in fact, routinely expressed his desire to bilk Aetna and other payors.”

The hospital overcharging lawsuit included claims under the Racketeer Influenced and Corrupt Organizations Act, in addition to claims for interference and breach of contract.

The case is Aetna Life Insurance Co. v. Robert A. Behar, M.D. et al, Case No. 4:15-cv-491 in the US District Court for the Southern District of Texas.