St. Joseph’s Medical Center Agrees to Pay $4.9 Million For Medically Unnecessary Hospital Admissions

Baltimore, Maryland - St. Joseph’s Medical Center, a hospital located in Towson, Maryland, has reached a settlement with the United States to pay $4.9 million in connection with its submission of false claims to Medicare, Medicaid, and other federal healthcare programs, the United States Attorney’s Office for the District of Maryland announced today.

This settlement resolves the hospital’s civil liability to the United States under the False Claims Act for the hospital’s voluntary disclosure that from 2007-2009 it engaged in a practice of admitting patients to the hospital unnecessarily. In particular, the hospital disclosed that it admitted patients for short stays - typically 1 or 2 days - that were not warranted by the patient's medical condition, and thereby generated a larger reimbursement than was proper for each patient. Of the $4.9 million to be paid by St. Joseph’s, $4.75 million will go the United States, and $152,406 will go to the State of Maryland, which is also a party to the agreement.

“Medical providers drain the resources of federal and state health care programs when they bill the government for unneeded medical procedures,” said the United States Attorney for the District of Maryland Rod J. Rosenstein.

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, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department's total recoveries in False Claims Act cases since January 2009 are over $14 billion.

Enacted during the Civil War, the False Claims Act is the government’s primary civil tool to combat fraud and abuse in federal programs and procurement. The Act allows the government to recover triple the amount of its actual damages, plus a civil penalty of $5,500 to $11,000 for each false claim.

United States Attorney Rod J. Rosenstein commended the Office of Inspector General of Department of Health and Human Services, the Department of Defense Criminal Investigative Services, the Inspector General for the Office of Personnel Management and the Justice Department’s Commercial Litigation Branch for their resolution of this matter. Mr. Rosenstein also thanked Assistant U.S. Attorney Thomas F. Corcoran, who handled the case.