St. Vincent Health System, Erie, Pa., has agreed to pay the U.S. government $1.9 million to settle a whistle-blower lawsuit alleging abuse of Medicares outlier program by the two-hospital systems principal facility, 456-bed St. Vincent Health Center in Erie.
The settlement is not an admission of liability, and in the agreement St. Vincent denies the contentions of the lawsuit and asserts the billing practices were legal and in line with prevailing regulations. The case was brought in 2005 by hospital consultant Anthony Kite, who alleged in this and other False Claims Act complaints that many hospitals and systems inflated their reported costs in order to squeeze higher reimbursement from the outlier program, which is intended to compensate hospitals for unusually expensive care.
St. Vincent was prepared to defend its actions in court if necessary, but the board of trustees decided it was best to put this matter behind it, the hospital said in a written statement. The decision to settle allows St. Vincent to continue to focus its resources on its patients and the health of the community.
Another target of the same lawsuit, 651-bed St. Josephs Regional Medical Center in Paterson, N.J., settled for $1.75 million in October while likewise denying any improper conduct. The Justice Department declined to join the lawsuit against either St. Vincent or St. Joseph but has pursued similar allegations against others. -- by Gregg Blesch