CHW, Mercy Health Care Sacramento Settle Medicare Overpayment Lawsuit for $2.9M

Catholic Healthcare West and its subsidiary Mercy Healthcare Sacramento have agreed to pay the federal government $2.9 million to settle a lawsuit alleging that the hospital chain knowingly kept Medicare overpayments, the Sacramento Bee reports. The case stems from a government error in Medicare payments to Mercy American River Hospital in 1992 and 1993. Instead of billing Mercy American for $706,800, Medicare "inadvertently" sent a check to the facility for that amount. The hospital then submitted cost reports indicating it had paid the money (Cooper, Sacramento Bee, 7/10). While agreeing to settle the lawsuit, CHW did not admitting "any wrongdoing" (San Francisco Chronicle, 7/10). The lawsuit was filed in 1998 by former Mercy consultant Arlan Boyd, who will be paid $580,000 by the government for acting as the whistle blower in the case. As part of the settlement, Mercy will pay Boyd $75,000 for legal expenses. The Bee reports the settlement comes in "a string" of lawsuits against CHW (Sacramento Bee, 7/10). In May, CHW settled a suit for $10.25 million over allegations that it submitted Medicare and Medi-Cal claims for nonreimbursable physical exams, billed physician referrals as more expensive consultations and filed claims for undocumented lab work (California Healthline, 5/17). Another lawsuit, pending in federal court, alleges that CHW overcharged Medicare $19 million by "systematically filing false reports" and failing to disclose government errors (Sacramento Bee, 7/10).