ATLANTA — Grady Health System has agreed to pay $2.95 million to settle charges that it improperly billed Medicaid for treatment to neonatal intensive care (NICU) patients, the Georgia attorney general announced Thursday.

The state of Georgia alleged that Grady inflated billings for certain services provided to these NICU patients, resulting in either unjustified or inflated payments from Medicaid.

“This settlement demonstrates our office’s continued commitment to protecting crucial Medicaid dollars from fraud and abuse,” said Attorney General Sam Olens in a statement. “The health of NICU patients is fragile, and we must ensure that every Medicaid dollar is properly spent on their care.”

A spokeswoman for Olens said the Grady billing problem occurred from March 2008 to November 2012. Lauren Kane, the spokeswoman, told GHN in an email that “no single individual” at Grady was responsible for the overbilling.

The case was initially developed by Myers & Stauffer, the recovery audit contractor for the Georgia Department of Community Health, which runs the Medicaid program in the state. It was investigated by members of the Georgia Medicaid Fraud Control Unit, a division of the Office of the Attorney General.
Grady, the state’s biggest safety-net provider, declined to answer questions about the case.

Tim Jefferson, chief legal counsel for Grady, said in a statement, “Grady is proud of the care we provide to Georgia’s most vulnerable infants through our Neonatal Intensive Care Unit. We are pleased that we were able to work with the state to resolve a billing issue that was completely unrelated to the quality of care provided to these babies. Grady cooperated fully throughout the investigation and has reimbursed the state.”

Grady’s financial picture has improved in recent years under new leadership. The health system recently reached a new contract with Blue Cross and Blue Shield of Georgia, the state’s largest health insurer, after a financial dispute that kept its patients out of the Blue Cross network for four months.


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