Cathedral Healthcare System Inc. will pay the United States $5.3 million to settle allegations that it defrauded the federal Medicare program, according to a March 4, 2008 press release from the Dept. of Justice.
Whistleblowers had charged that the hospital violated the False Claims Act by improperly inflating charges for inpatient and outpatient care to make the cases appear more costly than they were. This practice enabled the hospital to receive additional reimbursement, called outlier payments, intended by Medicare to compensate hospitals for handling cases where the cost of care is unusually high.
The relators will receive $848,000.