NJ Hospitals Pay $7.95M to Settle Medicare Whistleblower Allegations

John Commins, for HealthLeaders Media , December 16, 2009

Our Lady of Lourdes Health Care Services Inc. will pay the government $7.95 million to resolve allegations that two of its New Jersey hospitals defrauded Medicare, the Justice Department has announced.

The hospitals are Our Lady of Lourdes Medical Center in Camden and Lourdes Medical Center of Burlington County in Willingboro. Calls to the Camden-based health system seeking comment on the settlement were not immediately returned.

"As the settlement demonstrates, the Department of Justice is committed to pursuing those who defraud Medicare and drive up the costs of healthcare," said Assistant Attorney General Tony West, head of the Civil Division of the Department of Justice.

Lourdes Medical Center was a defendant in a civil suit filed in 2005 by whistleblower Tony Kite, a private healthcare consultant, who alleged that the hospital fraudulently inflated its charges to Medicare patients to collect enhanced reimbursement from Medicare under the program's outlier payments provision. Under the civil settlement announced Tuesday, Kite gets $356,000, plus interest, from the settlement.

In a separate investigation of Our Lady of Lourdes Medical Center, the government alleged that the hospital also wrongfully obtained excessive Medicare outlier payments.

Our Lady of Lourdes Health Care is part of the Catholic Health East system, which is based in Newtown Square, PA.

West said the settlement was the result of the coordinated efforts of DOJ's Civil Division, the U.S. Attorney's Office in New Jersey, HHS' Office of Inspector General, CMS, and the FBI.

John Commins is a senior editor with HealthLeaders Media.

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