Three HealthEast hospitals will pay the federal government $2.28 million in a whistleblower lawsuit settlement for overcharging Medicare on a type of spinal surgery known as kyphoplasty. The procedure can be performed as outpatient surgery, but was allegedly billed by the hospitals as inpatient from 2002 to 2007, overcharging Medicare and increasing their revenue.

The St. Louis, Minnesota-based hospitals were charged by two whistleblowers, who were former Kyphon employees, under the False Claims Act. The U.S. Attorney’s Office in Buffalo and multiple Department of Health and Human Services special agents are leading the government investigation.