The U.S. Department of Justice has announced its collaboration with three whistleblowers in two lawsuits against three New Jersey hospitals.
The lawsuits allege that Robert Wood Johnson University Hospital in Hamilton, Barnert Hospital in Paterson and Bayonne Hospital in Bayonne fraudulently inflated their charges to Medicare patients to obtain enhanced reimbursement from Medicare.
Peter Salvatori, Sara C. Iveson and James T. Monahan filed their lawsuits in 2002 under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens with knowledge of financial fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery.
According to the Justice Department, 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 payment system to ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs.
"When a suit becomes before us, a determination is made if the claim is valid, then we join the suit," said a spokesman for the Justice Department. "We either work out a settlement or go to court."
Whistleblowers receive 15 percent to 25 percent of the potential settlement or winnings in a trial if they were not knowingly part of the fraud itself, according to the Justice Department.
Salvatori and Iveson sued Robert Wood Johnson and Barnert, while Monahan sued Robert Wood Johnson and Bayonne. Barnert and Bayonne have since filed for Chapter 11 bankruptcy protection.