Department of Justice SealDepartment of Justice
Wednesday, September 24, 2008
(202) 514-2007
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New Jersey Hospital to Pay $3.85 Million to Resolve Allegations of Inflating Charges to Obtain Higher Medicare Reimbursement

WASHINGTON – Cooper University Hospital in Camden, N.J., has agreed to pay the United States $3.85 million, plus interest, to settle allegations that it defrauded Medicare, the Justice Department announced today.

The settlement resolves allegations that the hospital improperly increased charges to Medicare patients to obtain enhanced reimbursement from the federal health care program. In addition to its standard payment system, Medicare pays supplemental reimbursement, called outlier payments, to hospitals in cases where the cost of care is unusually high. Congress had enacted the supplemental payment system to provide the incentive to hospitals to treat such patients.

The Justice Department alleged that, between January 2001 and August 2003, Cooper improperly inflated charges for inpatient and outpatient care to make its costs for providing such care appear greater than they actually were, and thereby obtain outlier payments from Medicare that it was not entitled to receive.

"Today’s settlement demonstrates the commitment by the Justice Department to combating practices by which hospitals knowingly overcharge the federal Medicare program," said Assistant Attorney General Gregory G. Katsas, head of the Department’s Civil Division.

"This office remains determined to ensure the integrity of the Medicare system for the citizens of New Jersey," said Christopher J. Christie, U.S. Attorney for the District of New Jersey.

The civil settlement agreement resolves allegations against Cooper originally brought in a suit by Anthony Kite. Under the False Claims Act, private citizens may bring lawsuits on behalf of the federal government. Under the settlement, Mr. Kite will receive $654,500.

The settlement with Cooper was the result of a coordinated effort among the Justice Department’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of New Jersey, Affirmative Civil Enforcement Unit; the U.S. Attorney’s Office for the Eastern District of Pennsylvania; the Department of Health and Human Services, Office of Inspector General and Office of Counsel to the Inspector General; the Centers for Medicare and Medicaid Services; and the FBI, in investigating and resolving the allegations.