The United States has settled with a New Jersey hospital named by a whistleblower in a Medicare fraud suit and has sought to intervene in the same case against a New York facility. The government will receive a sizable settlement from Trinitas Regional Medical Center in Elizabeth, N.J. and will pursue claims against Brookhaven Memorial Hospital, located in East Patchogue, N.Y. The whistleblower suit was originally filed in 2005 by Tony Kite, and alleges that the two hospitals fraudulently inflated charges to Medicare patients as part of a scam to take in higher reimbursements from Medicare.

The case involved an alleged scheme to obtain supplemental “outlier payments” from Medicare. Outlier payments are supplemental reimbursements provided by Medicare in addition to its standard payment system, to health care providers in circumstances where the cost of care is particularly high. Congress authorized the outlier payments program to ensure that hospitals would treat patients who need unusually expensive care. Kite’s lawsuit alleged that the hospitals hiked up their charges to receive outlier payments in cases where the expenses were not excessively high and did not meet the criteria for outlier payments.

Mr. Kite’s whistleblower suit, filed under the Qui Tam provisions of the False Claims Act, entitles him to participate in the government’s present settlement with the New Jersey hospital and any future settlement with the New York facility.

For the full story, go to the Department of Justice’s press release.