2002-10-17 -- General Hospital Center at Passaic/ Hackensack University Medical Center -- Settlement -- News Release

Two North Jersey Hospitals Pay $1 Million to Settle Medicare Overbilling Allegations

NEWARK - Two North Jersey hospitals have agreed to pay the United States more than $1 million to settle allegations that their facilities unlawfully charged federal health care programs for surgical procedures using experimental cardiac devices, U.S. Attorney, Christopher J. Christie announced today.

The General Hospital Center at Passaic, which is part of Atlantic Health System, has agreed to pay the United States $760,000. Hackensack University Medical Center has agreed to pay the United States $314,000.

The New Jersey settlements are among the latest group of such settlements involving cardiac devices implanted in patients, according to an announcement today by the Department of Justice. Nationwide, the settlements announced today bring the total Medicare reimbursements from hospitals to more than $40 million.

The government alleged that between 1989 and 1994, the hospitals violated the False Claims Act by charging the government for implanting experimental medical devices that were not reimbursable by Medicare. Specifically, the government alleged that the hospitals were using on patients experimental cardiac devices which had not been proven safe and effective by the Food and Drug Administration.

The hospitals denied wrongdoing.

These hospitals and more than 100 others in the country had been named as defendants in a whistleblower lawsuit filed by Kevin Cosens, a former medical device salesman. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery obtained by the government. Cosens will receive more than $214,000 from the New Jersey settlements. He will receive more than $1 million in total from the group of seven settlements announced today, including those in New Jersey and others in California, Massachusetts and Utah.

U.S. District Judge John C. Lifland signed the Hackensack University Medical Center agreement on Oct. 2 and the Passaic agreement in September.

The United States has previously entered into settlements with 29 other hospitals named as defendants in the case, for a total of more than $40 million. The government is continuing to pursue claims against 46 other hospital defendants.

The government's investigation was conducted by investigators assigned to the Affirmative Civil Enforcement Unit of the Civil Division of the United States Attorney's Office. The United States was represented by Lani Anne Remick, Staff Attorney with the Department of Justice, Civil Division, and Assistant U.S. Attorney Stuart A. Minkowitz of the U.S. Attorney's Civil Division in Newark.

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Defense Attorney: Andrew F. McBride, III, Esq. Liberty Corner (Atlantic Health System)

James V. Hetzel, Esq. Liberty Corner (Hackensack University Medical Center)