A settlement has been reached in a whistleblower class action lawsuit brought against Brookhaven Memorial Hospital who is accused of fraudulently inflating charges to Medicare.
The United States settled for $2.92 million, plus interest and the whistleblower will receive roughly $613,000, plus interest.
The case was originally filed by a whistleblower in 2005 against two different hospitals. The United States alleged that the hospitals defrauded Medicare by fraudulently inflating 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 hospitals inflated their charges to obtain supplemental outlier payments for cases that were not extraordinarily costly and for which outlier payments should not have been paid.
