A substantial settlement has been reached between the federal government and Cooper University Hospital in Camden, New Jersey concerning charges that the hospital defrauded Medicare by improperly billing for “outlier payments.” The scheme arose in connection with a Medicare program designed to encourage hospitals to treat patients whose care is particularly costly. In such cases, Medicare makes enhanced reimbursements to health providers in addition to customary charges. The supplemental reimbursements are known as outlier payments.

A federal False Claims Act suit alleged that for two years, between 2001 and 2003, the hospital defrauded Medicare by falsely inflating bills for both inpatient and outpatient care with the intent of receiving outlier payments from Medicare to which the hospital was not entitled. The whistle blower in the case was Anthony Kite, an independent New Jersey hospital consultant. Under the Qui Tam provision of the federal False Claims Act, Mr. Kite is entitled to a sizable share of the settlement resulting from the whistle blower suit he filed on behalf of the federal government.

For the full story, go to Market Watch.