Methodist Hospital in Houston agreed to pay the U.S. government $10 million to resolve alleged abuse of Medicares outlier program between 2001 and 2003, the Justice Department announced.
In a settlement agreement, the 941-bed hospital denies the governments contentions and stipulates that the settlement does not imply an admission of liability. Methodist Hospital, the government alleged, increased charges without respect to the actual costs in order to get bigger payments from the outlier program, which is intended to compensate hospitals for unusually expensive care.
Dozens of hospitals in the past several years have faced similar allegations, often initiated by whistle-blower lawsuits. That was not the case with Methodist, Chief Legal Officer Mick Cantu said. He speculated that the Justice Department is working through a list of hospitals that received the highest outlier payments given to Congress in 2003 testimony by then-CMS Administrator Thomas Scully.
Cantu said the hospitals overall costs for Medicare services exceeded payments during the time in question and attributed the outlier issue to a failure on the part of the Medicare fiscal intermediary to update the hospitals cost-to-charge ratio. We firmly believe there was no fraud here, Cantu said.