Md. hospital to pay $5 million settlement

The suburban Maryland hospital formerly known as St. Joseph Medical Center, which already has a corporate integrity agreement with the government, agreed to pay nearly $5 million to settle new allegations involving short inpatient stays.

Catholic Health Initiatives sold the 320-bed hospital in Towson, Md., to the University of Maryland Medical System on Dec. 1, but CHI is paying the settlement under its agreement to cover liabilities at the hospital that pre-dated the deal.

Officials at the hospital—which is now University of Maryland St. Joseph Medical Center—voluntarily reported the alleged overpayments to the HHS inspector general's office and the Justice Department in June 2010.

A CHI spokeswoman said a routine compliance audit at the hospital discovered potential issues with an undisclosed number of patients from 2007 to 2009 who were admitted for one- and two-day hospital stays (PDF) even though their medical conditions didn't require the treatment, generating higher payments from Medicare and Medicaid than were justified.

The hospital agreed to pay $4.9 million without admitting liability or wrong-doing, according to a Justice Department news release. A spokeswoman for CHI said the cases involved in the settlement were from multiple service lines, and not concentrated in any one department or physician practice.

This month's settlement and underlying allegations were unrelated to a $22 million settlement the hospital agreed to pay in November 2010 to resolve accusations that a hospital contract with a cardiology group created kickbacks and illegal referrals for cardiac care and stenting between 1996 and 2006.

The hospital did not admit liability in that case, either, but did sign a five-year corporate integrity agreement (PDF) with the HHS inspector general's office following the settlement.