Department of Justice SealDepartment of Justice
Friday, October 17, 2008
(202) 514-2007
TDD (202) 514-1888

New Orleans Area Hospital to Pay $3.3 Million to Resolve Medicaid Fraud Allegations

WASHINGTON – West Jefferson Medical Center will pay the United States and the State of Louisiana $3.3 million to resolve allegations that the hospital overcharged the Medicaid program, the Justice Department announced today.

The settlement resolves allegations in a qui tam suit brought under federal and state False Claims Acts. The lawsuit alleged that the Marrero, La., hospital, led the Medicaid program to believe that the medical center’s Pediatric Intensive Care Unit (PICU) had the capability to perform certain critical care services when, in fact, the unit did not possess such capability. As a result, Medicaid overpaid the hospital between March 1998 and October 2003.

A qui tam suit is one brought by a private citizen on behalf of the government, who may then obtain a share of the proceeds. The relator, Leslie Klemm, who was a nurse at the hospital, filed the suit on behalf of the government and will receive $627,000 as her share of the state and federal recovery.

"The Department is committed to recovering money fraudulently obtained from the Medicaid program," said Gregory G. Katsas, Assistant Attorney General for the Civil Division. "It is essential to ensure that scarce Medicaid dollars are not misspent, but that they go to help those who most need them."

"As the Greater New Orleans area continues to recover from the devastation of Hurricane Katrina, it is important that those entrusted with providing our community with critical health care have the capability to meet those needs," said Jim Letten, U.S. Attorney for the Eastern District of Louisiana. "This successful civil resolution of serious allegations of abuse of the Medicaid Program should send a strong message to the health care community that precious health care dollars are not to be obtained improperly. This office remains committed to eradicating fraud where ever it may be found."

William Root, Special Agent-in-Charge of the Baton Rouge Field Office of Investigations of the Department of Health and Human Services Office of Inspector General (HHS-OIG), said that he was gratified with the outcome of the investigation and gave special recognition to the cooperative effort of the agents from the HHS-OIG and the state’s Medicaid Fraud Control Unit.

The investigation was a cooperative effort between HHS-OIG, the Louisiana Attorney General’s Medicaid Fraud Control Unit, the Office of the U.S. Attorney in New Orleans and the Justice Department’s Civil Division.