Medicare fraud: Saint John's Health Center to pay $5.25M for overbilling

August 26, 2010 — 10:06am ET | By Sandra Yin

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Saint John's Health Center

Saint John's Health Center of Santa Monica, which LA Weekly refers to as the hospital to the stars, will pay the U.S. government $5.25 million to settle claims of over-billing Medicare.

"This is a good recovery for the U.S., Assistant United States Attorney Cathy Ostiller told FierceHealthcare. "And it endeavors to return to the taxpayers and into the Medicare program payments that this hospital was not entitled to receive."

The hospital, which is where Farrah Fawcett died, will make the payment by Aug. 30.

Saint John's had been under investigation for over-billing since 2006, Ostiller told the Associated Press.

By allegedly turbocharging--raising its charges more quickly than its actual costs were rising--between 1996 and 2003, Saint John's obtained significant amounts of Medicare outlier payments that it was not entitled to receive, according to the U.S. Attorney's press release.

Medicare thought that the hospital was entitled to outlier payments, which are designed to compensate hospitals for providing especially costly care to patients, Ostiller said. But it wasn't.

To learn more:
- read the settlement agreement with Saint John's Health Center
- see the U.S. District Attorney's office press release
- read the Associated Press article
- here's the LA Weekly article