Robert Wood Johnson Univ. Hosp. pays $6.35 million to settle outlier Medicare payments False Claims Act case

by Ben Vernia | March 19th, 2010

The Department of Justice announced on March 19 that Robert Wood Johnson Univ. Hosp., of Hamilton, NJ, has paid $6.35 million to settle claims brought by a whistleblower that the hospital inflated its charges to obtain supplemental “outlier” payments from Medicare. According to DOJ’s press release:

In addition to its standard payment system, Medicare provides supplemental reimbursement, called “outlier payments,” to hospitals and other health care providers in cases where the cost of care is unusually high. Congress enacted the supplemental outlier payments system to ensure that hospitals have the incentive to treat inpatients whose care requires unusually high costs. The two lawsuits filed against Robert Wood Johnson University Hospital Hamilton alleged that the hospital inflated its charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid. The United States intervened in both lawsuits in January 2008.

The case was brought to DOJ’s attention in two whistleblower suits (one of which had two whistleblowers). The qui tam plaintiffs will receive $1,111,250, or a 17.5% relator’s share.

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