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Saint Joseph’s Hospital of Atlanta to Pay U.S. $26 Million to Settle False Claims Allegations

WASHINGTON – Saint Joseph’s Hospital of Atlanta Inc. and Saint Joseph’s Health System Inc. have agreed to pay the United States $26 million to settle allegations that the medical facility violated the False Claims Act with regard to billing for inpatient admissions and other services, the Justice Department announced today. The settlement resolves an investigation primarily focusing on Saint Joseph’s Hospital’s submission of Medicare claims from the years 2000 through 2005, where services that should have been billed as “outpatient visits” were charged at the higher rate as “inpatient admissions.”

The settlement covers claims submitted by Saint Joseph’s Hospital for short inpatient admissions, usually of one day or less but sometimes longer, where the services were such that they should have been billed on an outpatient “observation” basis or as an emergency room visit. It also covers claims where the hospital admitted patients for three days, without meeting the criteria for a covered admission, so the patients would qualify under Medicare payment rules for subsequent coverage for skilled nursing facility services. In addition, the settlement includes certain claims submitted by the hospital for inpatient admissions relating to placement of carotid artery stents, which were not covered under Medicare benefits.

The qui tam, or whistleblower lawsuit, was filed by Tami Ramsey, a former hospital employee. Ms. Ramsey, a registered nurse, will receive $4.94 million as her share of the recovery in the case.

“This significant settlement demonstrates our commitment to protect public funds from fraud and abuse,” said David E. Nahmias, U.S. Attorney for the Northern District of Georgia. “Every hospital that submits claims to the Medicare program must ensure that its services are billed appropriately. We will continue to vigorously pursue Medicare providers who disregard billing rules.”

“Health care providers in the Medicare program have an obligation to turn square corners when dealing with the government,” said Jeffrey S. Bucholtz, the Acting Assistant Attorney General for the Civil Division. “This means that hospitals must go the extra mile to ensure that any claims for payment they submit to Medicare reflect the correct level of service.”

The United States has agreed to dismiss the lawsuit as a result of today’s settlement. As a condition of continued participation in federal health care programs, the Office of Inspector General (OIG) of the Department of Health and Human Services has required Saint Joseph’s Hospital and Health System to enter into a Corporate Integrity Agreement. The agreement subjects Saint Joseph’s to strict policies and procedures to ensure future compliance with applicable statutes and regulations that govern the use of federal health care funds.

“Any time a false claim is submitted for payment, the Medicare program suffers,” said U.S. Department of Health and Human Services Inspector General Daniel R. Levinson. “OIG will work closely with our law enforcement partners to identify and hold accountable providers who obtain crucial Medicare dollars through inappropriate billing.”

The investigation was jointly handled by the U.S. Attorney’s Office in Atlanta; the Commercial Litigation Branch of the Justice Department’s Civil Division; and the Department of Health and Human Services, Office of Inspector General.