New York Hospital to Pay $2.92 Million Settlement Concerning Outliers

eduTrax News Service -- Feb. 25, 2010.

Brookhaven Memorial Hospital Medical Center Agrees to $2.92 million plus interest to settle allegations concerning outlier payments

The Department of Justice (DOJ) published a press release on February 25, 2010, stating that Brookhaven Memorial Hospital Medical Center, a Long Island, a 306-bed nonprofit acute-care N.Y.-based hospital, has agreed to pay $2.92 million, plus interest, to settle allegations that the hospital defrauded Medicare, by inflating its charges to obtain suplemental outlier payments for cases that were not extraordinarliy costly and for which outlier payments should not have been paid.

Brookhaven is one of 19 New York and New Jersey hospitals named in a 2005 False Claims Act lawsuit. The suit, filed by Tony Kite, an independent hospital consultant turned whistleblower, alleged that the hospitals, with the assistance of outside consultants, exaggerated Medicare bills to obtain supplemental outlier payments.

Medicare makes outlier payments available to hospitals when the cost of care is unusually high. If charges are inflated to the extent they trigger undeserved outlier payments, hospitals may find themselves in hot water.

The DOJ alleged that between Jan. 1, 2002, and Aug. 7, 2003, “Brookhaven allegedly submitted or caused to be submitted false claims to the Government Health Care Programs for inpatient and outpatient outlier payments by increasing its charges for inpatient and outpatient care such that, when adjusted to costs pursuant to the outlier statute and regulations, these charges no longer reasonably reflected or approximated Brookhaven’s actual costs.”

Brookhaven has released a statement asserting that it “increased its charges as permitted by law in order to cover rising costs for providing care and to maintain the quality of patient care.” The hospital emphasized in the settlement that it “lawfully billed for the services at issue in accordance with prevailing statutory and regulatory requirements,” and it denied liability, claiming that despite accepting the settlement, all of its actions were fully legal and compliant.

See the complete press release HERE.