A Medical Device Daily

Raritan Bay Medical Center (Pert Amboy, New Jersey) has agreed to pay the U.S. government $7.5 million to settle allegations that it defrauded the Medicare program, the Justice Department reported. The settlement resolves allegations that Raritan Bay inflated charges to Medicare patients in order to obtain enhanced reimbursement from Medicare.

In addition to its standard payment system, Medicare pays supplemental reimbursement — known as "outliers" — to hospitals and other healthcare providers in cases where the cost of care is unusually high.

But the government alleged that, between January 1998 and August 2003, Raritan inflated charges for inpatient and outpatient care, obtaining outlier payments it was not entitled to receive.

The civil settlement agreement resolves allegations filed in three separate federal lawsuits brought by whistleblowers under the federal False Claims Act.

The hospital also entered into a corporate integrity agreement to ensure compliance with Medicare regulations and policies in the future.

"Today's settlement sends a strong message that the Justice Department will not tolerate practices where hospitals and other healthcare providers knowingly overcharge the federal Medicare program," said Peter Keisler, Assistant Attorney General for the Department's Civil Division.