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Fraud case highlights hazards for hospitals with insurance plans
Modern Healthcare

A whistle-blower lawsuit accusing two North Carolina hospitals of using their managed-care organization to fraudulently boost Medicare reimbursements shows complications that can arise as hospitals increasingly move into the insurance business.According to the lawsuit, North Carolina Baptist Hospital, Winston-Salem, and Charlotte-based Carolinas HealthCare System co-owned a managed-care organization, MedCost, which they used for their self-funded health plans. MedCost, the lawsuit alleges, imposed excessive costs on hospital employees and drove up what’s known as the wage index, which helps determine Medicare payments.

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