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Fraudulent “Outlier Payments” Result in Hospital Paying $6.35 Million, Says DoJ

March 23, 2010

Two whistleblower lawsuits under the federal False Claims Act alleging fraudulently inflated Medicare reimbursements have prompted Robert Wood Johnson University Hospital of Hamilton New Jersey-based hospital to pay $6.35 without admitting any guilt. Peter Salvatori, Sara Iveson, and James Monahan will share a whistleblowers’ reward of over $1,000,000. FraudBlawg reported on the suits last May, when the presiding judge denied Robert Wood Johnson’s motion to dismiss. In denying the hospital’s motion nearly a year ago, Judge Greenway stated, “the Government has pled facts which demonstrate non-disclosure and intentional misrepresentation, which are the hallmarks of ‘fraud.'” DoJ explains the fraudulent scheme:

In addition to its standard payment system, Medicare provides supplemental reimbursement, called “outlier payments,” to hospitals and other health care providers in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payments system to ensure that hospitals have the incentive to treat inpatients whose care requires unusually high costs. The two lawsuits filed against Robert Wood Johnson University Hospital Hamilton alleged that the hospital inflated its charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid.

“Taxpayer dollars should go towards quality health care, not wasted on fraud and abuse,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “As the settlement announced today demonstrates, the Justice Department is committed to pursuing those who defraud Medicare and drive up the costs of health care.”

To report Medicare Fraud, contact Frohsin & Barger.

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