Good Samaritan Hospital Agrees to Pay $793,548 to Settle False Claims Act Allegations

March 28, 2012

Baltimore, Maryland – Good Samaritan Hospital, a facility within the MedStar Health System, has agreed to pay the United States $793,548 to settle claims that it submitted false claims to federal health benefits programs over a four-year period between January 1, 2005 and December 31, 2008.

The settlement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.

United States Attorney Rod J. Rosenstein said, “Medical service providers must be held accountable for false representations that induce the government to make unwarranted payments.”

According to the settlement agreement, from January 1, 2005 and December 31, 2008, Good Samaritan Hospital (GSH) submitted fraudulent claims to federal health benefits programs that were reimbursed based upon rates inflated through the submission of false statements by GSH to the Maryland Health Services Review Commission (HSCRC) about the severity of GSH’s cases. The HSCRC is responsible for setting rates for acute inpatient care in Maryland that are used by all insurance companies, including federal health benefit plans. The claims submitted to the HSCRC by GSH included false statements that certain conditions existed that were not actually diagnosed or treated during patients’ admissions, including claims that patients suffered from malnutrition.

Specifically, the government alleges that GSH employed a system that added malnutrition as a secondary diagnosis when the diagnosis was not warranted and did so by manipulating the coding system. GSH employees used leading questions so that the physician would answer that the patient was malnourished, which was the result GSH wanted to achieve. Clinical forms that GSH used also injected false diagnoses of malnutrition into the record, which the coders then used to justify the code. By falsely coding inpatients with a secondary diagnosis of malnutrition, GSH caused its patient profile to appear worse than it was, thus increasing its reimbursement rate from the HSCRC. Federal health benefit insurance programs– Medicare, Medicaid and the OPM’s Federal Health Benefits Program – all paid inpatient hospital bills at the rate set by the HSCRC and were all accordingly damaged by paying GSH at the inflated rate.

Good Samaritan Hospital denies the allegations.

Enacted during the Civil War, the False Claims Act is the government’s primary civil tool to combat fraud and abuse in federal programs and procurement. The Act allows the government to recover triple the amount of its actual damages, plus a civil penalty of $5,500 to $11,000 for each false claim and permits the payment of a portion of any settlement or judgment under the Act to individuals who bring fraud to the attention of authorities.

United States Attorney Rod J. Rosenstein commended the investigative work performed by the Department of Health and Human Services Office of the Inspector General. Mr. Rosenstein also thanked Assistant U.S. Attorney Allen Loucks and Auditor Mary Hammond who handled the case.

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