ELIZABETH – Trinitas Regional Medical Center agreed to pay $3.02 million plus interest to settle claims that it defrauded Medicare, though the hospital “emphatically denies” any wrongdoing.
The lawsuit involved allegations that the hospital fraudulently inflated their charges to Medicare patients to obtain enhanced reimbursement from Medicare.
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 possess the incentive to treat inpatients whose care requires unusually high costs.
The lawsuit 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.
Whistleblower Tony Kite brought his suit under the False Claims Act, which permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery.
Under the civil settlement, Kite will receive roughly $679,000, plus interest, out of the total recovery against Trinitas Regional Medial Center.
Trinitas attorney John Martin said that the hospital chose to settle the matter to avoid potentially lengthy and expensive litigation.
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