Legal Update
LU
2 8 • O U T PA T I E N T S U R G E R Y M A G A Z I N E • J A N U A R Y 2 0 1 9
They got away with fraudulently unbundling orthopedic surgery
claims to inflate their bills to federal payers by millions for 7
years, but the U.S. Justice Department finally caught up to
Coordinated Health, a Lehigh Valley, Pa.-based, for-profit hospi-
tal and health system that last month paid $12.5 million to settle
allegations they submitted false claims for orthopedic surgeries.
The government alleges that Coordinated Health regularly
affixed modifier 59 to its request for payment for reimbursement
of orthopedic surgery claims. The billing code tells the payer that
it's appropriate to pay a separately billed service that was not
part of the original surgery.
One surgeon routinely diagnosed his knee replacement patients
with poor patellar tracking and stated he made an incision to
improve patellar tracking, says the government. This type of incision
is covered under the global surgery reimbursement for knee arthro-
plasty, but Coordinated Health systemically misused modifier 59 to
bill for the incision as if it had been performed separately from the
knee replacement — even after independent coding consultants
twice warned hospital executives against it, alleges the government.
"It is improper 'unbundling' when a provider submits a claim for a
global reimbursement for a surgery and misuses modifier 59 to
separately bill for parts of the same surgery," says the government.
The health network's billing practices will be monitored for 5
years due to a corporate integrity agreement with the U.S.
Department of Health and Human Services. Coordinated Health
did not admit any wrongdoing or liability under the settlement.
— Dan O'Connor
Hospital Improperly Unbundled
Orthopedic Surgery Claims
MODIFIER 59
