SAN DIEGO HOSPITAL TO PAY U.S. $6.2 MILLION
TO SETTLE FALSE CLAIMS ALLEGATIONS

WASHINGTON, D.C. – The San Diego Hospital Association and one of its facilities, Sharp Memorial Hospital, have agreed to pay the United States $6.2 million to settle allegations that Sharp submitted false claims by fraudulently misstating organ acquisition costs on the hospital's Medicare reports for 1991 through 1999, the Justice Department and United States Attorney in San Diego announced today. The alleged misrepresented costs include employee salaries, medical director fees, laboratory costs and square footage that were not incurred or used for organ acquisition activities and thus did not qualify for reimbursement under Medicare regulations as organ acquisition costs.

The allegations arose from a lawsuit filed by Judith A. King under the qui tam or whistleblower provisions of the False Claims Act, which allow a private person to sue on behalf of the United States and share in any recovery. King, a heart transplant coordinator at Sharp Memorial, will receive $1.2 million of the settlement proceeds.

"This settlement illustrates the Justice Department's determination to recover funds that are owed to the United States," said Robert D. McCallum, Jr., Assistant Attorney General for the Civil Division. "We will vigorously enforce the False Claims Act for the protection of the taxpayers and the United States government."

"Ensuring the integrity of Medicare and other health care programs is an extremely important priority in this district," United States Attorney Carol C. Lam said. "Health care providers can and will be held accountable if they engage in improper billing practices."

As part of the settlement, the San Diego Hospital Association, which includes Sharp Memorial Hospital and Grossmont Hospital Corporation, has entered into an Corporate Integrity Agreement (CIA) with the Office of Inspector General of the United States Department of Health & Human Services (HHS-OIG). The comprehensive, five-year CIA requires the San Diego Hospital Association to promote compliance with federal health care programs through an established compliance program, training and education, independent review of billing, coding and cost reporting practices, as well as annual reports.

This case was jointly handled by the Civil Division of the Department of Justice and the United States Attorney's Office for the Southern District of California. The investigation was conducted by the HHS-OIG Office of Audit Services and Office of Investigation.

The case is entitled United States and State of California ex rel. Judith A. King v. San Diego Hospital Association, Civil No., 00-CV-0848-BTM (RBB) (S.D. Cal. filed Apr. 26, 2000).

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