Nine hospitals in Alabama, Indiana, Florida, Michigan, South Carolina, New York and Minnesota have agreed to pay the US Government more than $9.4m for submitting false claims to Medicare.

The hospitals overcharged Medicare between 2000 and 2008 by performing kyphoplasty, a minimally-invasive surgery, as an inpatient treatment, despite the fact that the procedure can often be performed safely on a less costly outpatient basis.

All nine medical facilities, except St Elizabeth Medical Center in Utica and United Hospital in St Paul, were named as defendants in a lawsuit filed under the False Claims Act in 2008 in federal district court in Buffalo.

The US Justice Department has used the False Claims Act to recover about $2.2bn since January 2009 in cases involving fraud against federal healthcare.