New Jersey Hospital Pays $3.85 Million to Settle Whistleblower Lawsuit

Thursday, September 25, 2008 General News J E 4
WASHINGTON, Sept. 24 Cooper University Hospital has agreedto pay $3.85 million to the federal government to settle a whistleblowerlawsuit that alleged the Camden, New Jersey, hospital engaged in Medicarefraud by inflating its Medicare claims to increase its revenues.

The "qui tam" (whistleblower) case against Cooper hospital, which thefederal government joined, was under seal and not known to the public untiltoday.

The Medicare fraud allegations involved "outlier" payments, which aresupplemental payments Medicare makes when the actual costs for treating aparticular patient exceed a predetermined amount for that type of treatment.

From 2001 to 2003, the whistleblower said, Cooper hospital submitted toMedicare reimbursement claims that inflated its actual treatment costs so thatit qualified on paper for outlier payments. As a result, the hospitalreceived millions of dollars in outlier payments that it wasn't entitled toreceive.

"The government has been able to recover this money because of theinformation provided by a whistleblower," said Larry P. Zoglin, a SanFrancisco attorney with Phillips & Cohen LLP, which represented thewhistleblower. "Without our client's help, they probably wouldn't have foundout about Cooper's alleged outlier fraud scheme."

The qui tam lawsuit was filed in 2005 in federal district court in Newark,New Jersey, by Anthony Kite, an independent hospital consultant in New Jersey.Kite also was one of several whistleblowers who filed qui tam lawsuitsexposing outlier fraud by other New Jersey hospitals. The hospitals that havesettled those cases involving outlier payments were: Warren Hospital inPhillipsburg, New Jersey ($7.5 million); Bayonne Medical Center in Bayonne,New Jersey ($2.5 million); Cathedral Healthcare System, based in Newark, NewJersey ($5.3 million); and Raritan Bay Medical Center in Perth Amboy, NewJersey ($7.5 million).

Zoglin complimented the U.S. Department of Justice Civil Division and theU.S. Attorney's Office for the District of New Jersey for its investigationand prosecution of the case. "The government has made clear that it won'ttolerate hospitals that engage in Medicare fraud to try to boost theirrevenues at taxpayer expense," he said.

Phillips & Cohen specializes in representing whistleblowers in qui tamlawsuits. Under the False Claims Act, private individuals can sue companiesdefrauding the government and recover funds on the government's behalf.Whistleblowers, known as "relators," are entitled to 15 percent to 25 percentof the amount recovered as a result of the lawsuit. For more informationabout Phillips & Cohen and qui tam lawsuits, see

Case citation: U.S. ex rel. Kite v. Besler Consulting, et al,Case No. 05 :CV3066 (D.N.J.)

SOURCE Phillips & Cohen LLP


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