11-20-2003 -- Cathedral Healthcare -- Settlement -- News Release

Cathedral Healthcare to Pay $1.5 Million to Settle Medicare Overbilling

NEWARK - Cathedral Healthcare System, Inc., a healthcare network with four hospitals and numerous off-site locations in Essex County, today agreed to pay $1.5 million to settle claims that it overcharged Medicare, U.S. Attorney Christopher J. Christie announced.

A settlement agreement signed today provides that Cathedral will pay $1.5 million to settle claims that from 1992 through 1998 it wrongfully submitted claims for inpatient hospital stays for patients who received outpatient services. As a result of Cathedral's conduct, it received higher reimbursement than it would have had it billed properly, according to Assistant U.S. Attorney Stuart A. Minkowitz.

In the settlement agreement, Cathedral agreed to continue to follow its corporate compliance program to ensure proper billing procedures with Medicare and other federal health care programs. The agreement also provides that Cathedral will submit to the government annual reports regarding its compliance efforts and disclose violations of federal law to the government.

The settlement comes under the federal False Claims Act that permits the government to seek up to triple damages plus penalties for false or fraudulent claims to the government.

While agreeing to the settlement, Cathedral has denied the government's allegations. Cathedral cooperated during the government's investigation.

Christie credited Special Agents of the Office of Inspector General, Department of Health and Human Services, under the direction of Acting Principal Deputy Inspector General Dara Corrigan, with developing the case.

The government is represented by Assistant U.S. Attorney Minkowitz, a member of the Affirmative Civil Enforcement Unit of the U.S. Attorney's Civil Division in Newark, and Richard Linzer of the Office of Counsel to the Inspector General, Department of Health and Human Services.

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Defense Attorney: Paul Nittoly, Esq., Florham Park