LAWFUEL – The Law Newswire – The Loma Linda Behavioral Medicine Center (Loma Linda BMC) in Redlands has paid the government more than $2 million to settle allegations that it fraudulently overbilled federal health insurance programs. The settlement was paid on April 20, and this afternoon the government received notice that a federal judge had unsealed allegations against Loma Linda BMC contained in a “whistleblower” lawsuit.
The settlement – $2,049,451.30, which includes interest – resolves allegations made against Loma Linda BMC in a lawsuit filed pursuant to the qui tam provisions of the False Claims Act. The lawsuit was filed in 1998 by a former employee of Healthcare Financial Advisors (HFA), a consulting firm that assists hospitals in preparing cost reports that are submitted to insurers. The lawsuit alleges that HFA helped its hospital clients seek reimbursement for unallowable costs. The lawsuit specifically alleges that HFA helped clients prepare two cost reports – an inflated one that was submitted to Medicare and a second one, designed for internal use only, that more accurately reflected the amount of reimbursement the hospital should have received.
The alleged overbilling occurred from 1992 through 1996, when Loma Linda BMC submitted cost reports to Medicare and Medi-Cal that sought reimbursement unrelated to patient care at the hospital. The cost reports sought reimbursement for items such as an employee assistance program which serviced non-hospital employees, outpatient meals and start-up costs on an abandoned project.
HFA prepared and Loma Linda BMC maintained a secret, second set of cost reports, which were labeled “conservative,” for the years 1992 through 1996. Those internal records indicated that HFA and Loma Linda BMC knew that the costs sought on the filed cost reports were unallowable for Medicare reimbursement.
The settlement was negotiated by the United States Attorney’s Office for the Central District of California and the State of California Attorney General’s Office. This case was investigated by the Department of Health and Human Services, Office of Inspector General.
Loma Linda BMC paid the settlement without admitting any wrongdoing.
The settlement with Loma Linda BMC is the latest in a series of settlements with defendants in the qui tam suit. For example, last year Jackson Memorial Hospital in Miami, Florida paid more than $14 million and St. Elizabeth Regional Medical Center in Lincoln, Nebraska paid more than $4 million to settle allegations that they had failed to disclose and return overpayments made by the Medicare and state programs. A total of seven defendants have settled the HFA whistleblower lawsuit, cumulatively paying approximately $55 million to the government.
CONTACT: Assistant United States Attorney Wendy Weiss
Release No. 07-060