Raritan Bay Medical Center, Perth Amboy, N.J., agreed to pay $7.5 million to settle allegations it defrauded Medicare by improperly increasing charges to patients to obtain enhanced outlier reimbursement.
Raritan Bay denied wrongdoing, saying it believed its practices were in accordance with regulations during the period in question.
The federal government alleged that between January 1998 and August 2003, 392-bed Raritan Bay inflated charges for inpatient and outpatient care to make them appear more costly than they were, thereby obtaining outlier payments that it was not entitled to receive.
The civil settlement resolves allegations that were filed in three separate federal lawsuits brought by whistle-blowers, the Justice Department said in a news release. As part of the settlement, the hospital entered into a corporate integrity agreement.
Hospital officials said in a written statement that the hospital believed its billing practices in connection with the Medicare outlier payment system were in accordance with existing Medicare regulations.
Officials also said they were pleased they were able to resolve the matter. -- by Cinda Becker