US settles with one hospital, intervenes against another in outlier payment qui tam

by bvernia | November 19th, 2009

DOJ announced on November 18 that it had reached a settlement, of $3.02 million plus interest, with Trinitas Regional Medical Center in Elizabeth, New Jersey, and that it was intervening against Brookhaven Memorial Hospital in East Patchogue, New York.

The qui tam suit, brought in 2005 by relator Tony Kite, alleged that the hospitals had inflated their costs, and sought and received outlier payments (supplemental reimbursements made to hospitals and other health care providers in cases where the cost of care is unusually high) for cases which were not extraordinarily costly.

What DOJ’s announcement fails to mention is that its intervention against Brookhaven comes 22 months after it first declined to take over the qui tam. The government’s motion to intervene this month stated:

Since the filing of the United States’ initial election regarding Brookhaven, the United States continued to monitor discovery and the course of litigation between Relator and Brookhaven. The discovery process has brought to light additional facts that make the case against Brookhaven stronger and that were unavailable to the United States at the time it made its initial election. In particular, the United States received from the relator information that Brookhaven provided during discovery regarding the precise magnitude of its charge increases and the timing of these charge increases in relation to the dates when Brookhaven received recommendations from consultants to engage in turbocharging for the sole purpose of maximizing outlier payments.

The motion to intervene also refers to a settlement with Helene Fuld Medical Center, another hospital sued by Kite, but no public announcement has been made yet of that deal.

The relator will receive $697,000 for his share in the case against the settling hospital, the US announced.

Dan Spiro and Charles Biro, Trial Attorneys in DOJ’s Civil Fraud Section are handling the case for the US. The relator is represented by Jonathan Berck of New York.

Andrew Grosso of DC’s Andrew Grosso & Associates, and Peter Siachos of Garfunkel Wild & Travis, PC in Hackensack, NJ, represent Brookhaven Memorial Hospital.

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