St. Louis-based Daughters of Charity National Health System will pay $586,000 to settle allegations that four of its hospitals submitted false Medicare cost reports.
The hospitals were accused of "knowingly" failing to report discounts they had received for purchasing X-ray film and supplies from Eastman Kodak Co. from 1990 to 1996, according to the U.S. attorney's office in Boston.
The discounts, totaling between $200,000 and $862,000, weren't properly accounted for on Medicare cost reports, which means the hospitals received reimbursements to which they weren't entitled, federal investigators said.
The facilities involved were 514-bed St. Thomas Hospital, Nashville; 268-bed St. Mary's Medical Center, Saginaw, Mich.; 338-bed St. Vincent's Hospital, Birmingham, Ala.; and 520-bed Sacred Heart Hospital, Pensacola, Fla.
The overbillings were first brought to the government's attention by a whistleblower, who filed the complaint in Boston. The case was investigated by the HHS inspector general's office and the FBI, and it was handled by the U.S. attorney's office in Boston and the Department of Justice.
Daughters of Charity cooperated in the investigation and audited 21 acute-care hospitals the national health system owns, said Doug French, executive vice president and chief operating officer.
In the settlement with the government announced last week, the health system admitted no wrongdoing, French said.