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Published on October 03, 2018

Federal Court dismisses claim made against Lawrence Memorial Hospital

On Tuesday, Oct. 2, a federal judge summarily dismissed a False Claims Act lawsuit filed against Lawrence Memorial Hospital (LMH Health), fully clearing the health system of any wrongdoing.

The qui tam plaintiff, Megen Duffy, a former employee of LMH Health, filed the lawsuit in Kansas federal court in 2014 challenging the way LMH Health reported quality measures to Medicare. Specifically, the lawsuit claimed that LMH Health misrepresented arrival times of certain patients in the emergency department, which allegedly impacted LMH Health’s reimbursement from Medicare. A portion of the payments hospitals are eligible to receive from Medicare are tied to reporting and performance on quality measures—referred to generally as value based purchasing. LMH Health consistently denied the plaintiff’s claims. United States District Court Judge Sam A. Crow found no proof that any quality data reported by LMH Health impacted its Medicare reimbursement.

“Throughout this process, Lawrence Memorial Hospital resolutely defended its practices and procedures as they related to this lawsuit,” said Russ Johnson, President and CEO of LMH Health. “We are pleased to have a definitive ruling from the court that agrees with our position.

“We take great pride in the integrity of our organization,” Johnson said. “Our staff and physicians strive to meet the highest standards in every area of operation, clinically and financially, with our focus on doing what’s best for our patients. This ruling affirms our commitment to ensure quality and safe care for our patients.”

Johnson noted that defending this lawsuit has required an enormous amount of financial and human resources. “Healthcare costs are an important issue facing employers, individuals and federal programs across the country,” he said. “We have believed this was an unwarranted legal action from the beginning. Nevertheless, in defending our hospital, it has cost this community hospital over one million dollars. That is money that could have been used for providing care and services to people who need them so much. That is the real tragedy in this frivolous lawsuit.”

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