Nearly $2 million will be paid by hospitals in Minnesota and Texas to settle allegations of False Claim Act violations, according to the Justice Department.
In Minnesota, Wheaton Community Hospital, the city of Wheaton, Minn., and Stanley Gallagher have agreed to pay $846,461 to settle allegations that some hospital admissions violated the False Claims Act. According to the Justice Department, the settlement resolves allegations that WCH knowingly made false claims to Medicare for unreasonable and unnecessary hospital admissions.
The government contends that from 1998 to 2004, WCH admitted some patients and kept others in acute care when it was not medically necessary. The hospital then billed Medicare for the cost of the admissions.
"Hospitals and doctors have a responsibility to provide patients with reasonable and necessary care. When they neglect those obligations, patients and taxpayers suffer," said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.
In Texas, Texas Health Arlington Memorial Hospital will pay nearly $1 million to settle False Claims Act violations, according to U.S. Attorney James Jacks.
In August 2007, the hospital disclosed to the Department of Health and Human Services that one of its contracts with a physicians group potentially violated federal law, Jacks said.
The government alleged that the hospital wrongly paid an undisclosed amount to the doctors' group for blood gas lab tests. Medicare paid the hospital for the tests.
Hospital officials said they "discovered the problem during contract renewal negotiations in August 2007 and immediately reported the situation."
The qui tam, or whistleblower, provisions of the False Claims Act allow private individuals to file civil actions on behalf of the United States and share in any recovery. Steven Radjenovich, the whistleblower in the Minnesotta case, will receive $203,150 as his share of the settlement. Radjenovich formerly practiced at Wheaton Community Hospital with Gallagher.