New Jersey hospital agrees to hefty settlement to resolve federal allegations of Medicare fraud

April 16, 2010  |  Class Actions, Whistleblower/Qui Tam

Robert Wood Johnson University Hospital in Hamilton, New Jersey has reached a settlement with the U.S. Justice Department in lawsuits claiming that the hospital inflated its charges to Medicare patients in a fraudulent scheme to bill the federal health care program for larger reimbursements.  The lawsuits centered on “outlier payments” – Medicare’s supplemental reimbursement to health care providers for treatments that are unusually expensive.  The goal of the outlier payment system is to encourage hospitals to treat patients whose medical care requires exceptionally costly treatment.

The government intervened in two separate whistleblower lawsuits alleging that between 1998 and 2001, Robert Wood Johnson University Hospital fraudulently inflated its charges so that it could receive supplemental outlier payments for patients whose treatment was not extraordinarily costly and for whom outlier payments were not warranted.  The lawsuits were originally filed under the Qui Tam provisions of the federal False Claims Act, which allow private individuals who know of fraud against the government to file suit on behalf of the United States and to participate in the government’s recovery.  The two whistleblowers in these cases will receive a considerable sum for their efforts.

Learn more from the Department of Justice’s Press Release.

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