A federal judge in New Jersey on Tuesday tossed out a class-action lawsuit alleging that St. Barnabas Health Care System effectively stole $514 million from hospitals across the country by hogging Medicares pool of outlier payments.
St. Barnabas, a seven-hospital system based in West Orange, N.J., a year ago agreed to pay $265 million to the federal governmentwithout admitting any wrongdoingto settle whistle-blower lawsuits alleging the system inflated charges to sweeten payments between 1995 and 2003.
A week later 162-bed Longmont (Colo.) United Hospital and 48-bed Maine Coast Memorial Hospital, Ellsworth, Maine, filed a lawsuit contending that they and every other hospital that received outlier payments during those years suffered because HHS maintained the funding as a fixed pie while St. Barnabas allegedly took a bigger slice than it deserved.
Judge Dennis Cavanaugh of the U.S. District Court in Newark found that the hospitals suffered no direct injury.
This decision is very gratifying and a positive development for the St. Barnabas Health Care System, Ellen Greene, a St. Barnabas spokeswoman, said in a written statement.
The plaintiffs lawyer, Hal Hirsch of Greenberg Traurig in New York, said he would appeal the decision.
If you have a gun and you pull a trigger, the bullet can go through the government and hit the hospitalsits just that simple, Hirsch said. Hes saying they get no recovery? It doesnt work that way. -- by Gregg Blesch