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Overlook Hospital’s $8.999M False Claims Scam Exposed
AHS Hospital Corp., parent company of Overlook Hospital, has agreed to pay $8,999,999 to settle allegations that they violated the False Claims Act, announced officials today.
The settlement resolves claims that Overlook Hospital, owned and operated by AHS Hospital Corporation, and Atlantic Health Systems Inc., overbilled Medicare for patients treated on an inpatient basis when they should have been treated as observation patients or on an outpatient basis.
The whistleblower or qui tam provisions of the False Claims Act permit individuals, known as relators, to file these actions and share in a portion of the proceeds recovered by the federal government. The case was filed by former employees of Overlook Hospital under the pseudonym U.S. ex rel. Doe et al. v. AHS Hospital Corp., et al., Civ. No. 08-2042 (D.N.J.).
“We expect hospitals that participate in Medicare will bill for their services accurately and honestly,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division. “Hospitals have a responsibility to ensure that the Medicare rules are not abused and patients who should be treated as outpatients are not admitted as inpatients, increasing the hospitals’ reimbursements.”
“Billing Medicare for unnecessary inpatient services steals from taxpayers,” said Daniel R. Levinson, Inspector General for the U.S. Department of Health and Human Services. “Although that’s bad enough, it also requires hospitalizing people who don’t need it, causing inconvenience, discomfort and worse. The size of this settlement underscores the seriousness of the conduct.”
“Proper billing ensures fair compensation and protects Medicare dollars that are much needed for patient care,” said J. Gilmore Childers, First Assistant U.S. Attorney for the District of New Jersey. “Hospitals taking more than their entitled share of reimbursements, by improperly billing services as more expensive services, subject themselves to federal scrutiny.”
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.
Key Facts
- State: New Jersey
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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