Update #5
Department of Justice/Office of Inspector General
DRG Three-Day "Window" Project

TO: Allied Association Executives, Legal Counsel and Financial Specialists
FROM: John E. Steiner, Jr.
American Hospital Association
Office of General Counsel
(312) 422-2788
DATE: October 18, 1996

This is a status report on the federal government's investigation into the Medicare billing practices of approximately 4,600 hospitals. This initiative, conducted by the Departments of Justice and the Health and Human Services' office of inspector general alleges that hospitals submitted improper claims for certain outpatient services. The government has threatened False Claims Act charges. The AHA has maintained close communication with the team of government attorneys and auditors primarily responsible for the investigation, since it was launched in late 1994.

Next States

The U.S. Attorney's office for the Middle District of Pennsylvania, which is the office that initiated this project, recently informed us that it will send demand letters and model settlement agreements to: Georgia within two weeks; Texas and California within six weeks; New England states (Connecticut, Maine, New Hampshire, Rhode Island, Vermont) probably by the end of the year; and Colorado by the early part of next year.

The U.S. Attorney's demand letters, in effect, seek a settlement from the targeted hospitals. If the hospitals don't agree to negotiate a settlement, the U.S. Attorney's office has made it clear that it's next likely step is to take them to court for violations of the False Claims Act.

While many states may have more than one Assistant U.S. Attorney's office, we're told that the U.S. Attorney's office for the Middle District of Pennsylvania is attempting to ensure that they all use the same type of demand letter and model settlement agreements.



About AHA


Member Constituency Sections

Key Relationships

News Center

Performance Improvement

Advocacy Issues

Products & Services


Research & Trends


155 N. Wacker Dr.
Chicago, Illinois 60606

800 10th Street, N.W.
Two CityCenter, Suite 400
Washington, DC 20001-4956