County pays $6.8 million to settle fraud suit

Whistleblower will receive $1 million of the proceeds

By Bay City News Service

San Mateo County has agreed to pay $6.8 million to the U.S. government to resolve allegations that the San Mateo Medical Center submitted false claims for payments from the Medicare and Medicaid programs, U.S. Attorney Joseph Russoniello announced Thursday.

The medical center was accused of improper conduct between 1997 and 2007, including falsely inflating its bed count to Medicare to receive higher payments under the federal program's Disproportionate Share Hospital adjustment, according to the U.S. Department of Justice.

The DSH adjustment is an extra Medicare payment available to hospitals that meet certain requirements, including having 100 or more acute care beds.

The medical center was also accused of improperly obtaining payments under the Medicaid program for services provided to patients at the center's Institutes for Mental Disease who were between 22 and 64 years old.

Those services are ineligible for federal funding, and the county was required to report them separately to the California Department of Mental Health to ensure that no federal funds were used to pay for them, according to the U.S. Attorney's office.

The settlement resolves allegations that were filed in San Francisco by Ronald Davis, a former county employee who filed the lawsuit under the whistleblower provisions of the False Claims Act.

The act permits whistleblowers to bring lawsuits on behalf of the U.S. and receive a portion of the proceeds of a settlement. Davis will receive $1.02 million of the proceeds of the settlement, according to the U.S. Attorney's office.

"Today's settlement demonstrates the government's ongoing commitment to protect the integrity of federal health care programs," Assistant Attorney General Michael F. Hertz said in a statement.

Beverly Thames, public information officer for the San Mateo County Health Department, released a statement on behalf of the county, which denied intentional wrongdoing in the matter.

"At the time the alleged overpayments occurred, the regulations were in flux and open to interpretation...Due to the complexity of the rules, some beds that we thought qualified under the reimbursement program, in retrospect, may not have qualified," Thames said in the statement.

"We are pleased to settle this matter now. The San Mateo County Board of Supervisors authorized county counsel to settle out of court, rather than risk triple fines. In addition, the county will enhance training, auditing and reporting in its compliance program at San Mateo Medical Center," Thames added.


Like this comment
Posted by Scott
a resident of Menlo Park: Central Menlo Park
on Mar 14, 2009 at 11:36 am

It is notable that the "whistle blower" was a county employee who the tax payers paid to be a compliance officer. His job is to make sure that the billings and hospital policy were in compliance with the federal guidelines. If he had done the job he was paid to do, the county would not have had the fine. Instead he used his position to feather his nest to the tune of 1 million dollars tax free. Oh yeah, we still get to pay his pension.

When will our public employees actually respect the public trust.

Like this comment
Posted by Joan
a resident of Menlo Park: Allied Arts/Stanford Park
on Mar 14, 2009 at 12:40 pm

Scott, Do you know something the rest of us who read the article don't know? How can you reach the conclusion that "If he had done the job he was paid to do, the county would not have had the fine" with the limited information in the article? Don't you think it's at least possible that he TRIED to do his job, but met with resistance from his supervisors and thus had to blow the whistle to ACTUALLY do his job? Is it possible that he is a "former" employee because he was fired or pushed out of his job because his finding that the county was overcharging was not greeted warmly by his supervisors? (Do you understand the nature of whistleblower protection?)

Your remarks display either too great a willingness to jump to conclusions without thinking a situation through, or a hidden agenda. Don't know which it is, but comments like yours are irresponsible.

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