FOR IMMEDIATE RELEASECIV
FRIDAY, AUGUST 18, 2000(202) 514-2007
WWW.USDOJ.GOVTDD (202) 514-1888
NATION'S FORMER LARGEST PRIVATELY-OWNED
PSYCHIATRIC CHAIN REACHES BANKRUPTCY SETTLEMENT WITH UNITED STATES
WASHINGTON, D.C. - Charter Behavioral Health Systems, LLC, formerly the nation's largest privately owned psychiatric chain, has reached a settlement to pay the United States
$7 million to resolve claims of overcharging federal health care programs, including Medicare, the Justice Department announced today. Charter, which filed for bankruptcy protection earlier this year, was alleged to have knowingly engaged in fraudulently billing federal healthcare programs for services and falsely documenting in-patient and out-patient psychiatric services that were not medically necessary.
The United States will receive the $7 million settlement amount in cash by the end of this month or the date Charter concludes the sales of three specified psychiatric facilities, whichever date is earlier. In addition, the settlement allows the government the potential to collect an additional $8 million in compensatory damages for fraud, as administrative and unsecured claims in the bankruptcy case.
Under the agreement reached with Charter earlier this month, the Health Care Financing Administration (HCFA), the federal agency that administers Medicare, also will retain its right to audit Charter's fiscal year 2000 claims to recover any potential overpayments made to any Charter facility. The United States will waive its civil monetary claims under the False Claims Act.
Charter is currently liquidating all of its assets and as part of the liquidation wishes to sell 21 hospitals without interrupting Medicare payments. The government's consent is required for Charter to assign to the new operators the Medicare provider agreements for each of these facilities.