Saying it relied on the advice of consultants, a Bronxville, N.Y., hospital settled allegations that it fraudulently billed Medicare for laboratory tests.
Earlier this year, two Pennsylvania hospitals paid $570,000 to settle charges that they too falsely billed Medicare on the advice of the same consultants, New Jersey-based Metzinger Associates (May 12, p. 2).
The U.S. Justice Department sued the consulting firm for fraud in 1994 in U.S. District Court in Philadelphia and then later added 11 hospitals to the lawsuit. The court dismissed the case in March because the government was negotiating individual settlements with the hospitals and the consultants.
In this latest settlement, 280-bed Lawrence Hospital paid $85,000.
Federal prosecutors signed off on the deal in August, and MODERN HEALTHCARE obtained a copy last week under the federal Freedom of Information Act.
Lawrence Hospital admitted no wrongdoing in settling. The hospital said "it submitted no claim with actual knowledge of its falsity." Instead, it blamed oversight, human error and the consultants.
The Metzinger consulting firm is no longer doing business, said Joseph Fioravanti, the Media, Pa., attorney who represented one of the consultants, Harry Metzinger.
Metzinger and his partner, William Ritter, agreed to voluntary exclusion for three years from federal healthcare programs, said Ritter's attorney, Michael Walsh, of Reed, Smith, Shaw and McClay in Philadelphia.
As part of the settlement, the two consultants also agreed to pay a fine of $30,000 each.
"The government was able to determine through its investigation and discovery that the number of claims that they were able to pursue was precious few," Fioravanti said.
Walsh said the other eight hospitals named in the lawsuit have settled with the government and paid fines totaling more than $1 million.
James Sheehan, an assistant U.S. attorney in Philadelphia, whose office handled the lawsuit, didn't return calls for comment.
As part of its settlement, Lawrence Hospital agreed to do training with its billing employees and implement a compliance program.
Through a spokeswoman, hospital President Roger Dvorak issued a statement: "During the course of discovery, the government admitted that it had not found any instances in which Lawrence Hospital had done anything fraudulent. There was never any finding of wrongdoing on Lawrence's part or any admission of wrongdoing by Lawrence."
The settlement covers a period from January 1989 to December 1994.