NJ system, consultant to pay $7.6M in outlier case

Newark, N.J.-based Cathedral Healthcare System has agreed to pay $5.3 million to resolve charges that it inflated charges to boost its income from Medicare outlier programs. This is just the most recent outlier settlement deal struck by the U.S. Department of Justice, which has conducted an extended investigation into outlier program abuse driven by whistle-blowers. In this case, the DOJ contends that between 1998 and 2003, the three-hospitals system was inflating charges to tilt the outlier formula in its favor. 

The DOJ also announced a whistleblower settlement with Besler & Company, a healthcare consulting firm based in North Brunswick, N.J., Besler & Company will pay $2.875 million, plus interest, to resolve allegations that between 2001 and 2003, it counseled hospital clients to increase charges in an effort to increase its outlier payments.

This caps a string of outlier settlements for the DOJ. In recent months, the agency also announced outlier settlements with Philipsburg, N.J.-based Warren Hospital and the 278-bed Bayonne (N.J.) Medical Center. Previously, in 2006, it settled similar allegations with St. Barnabas Health Care System of West Orange, N.J. Also, outliers were at issue in the DOJ's huge settlement with hospital giant Tenet Healthcare.

To learn more about the current outlier cases:
- read this DOJ press release [1]
- read this Modern Healthcare article [2] (reg. req.)

Related Articles:
Tenet wins $1B federal lawsuit over outlier payments. Report [3]
Medicare fraud costs CMS billions. Report [4]
St. Barnabas racketeering suit dismissed. Report [5]