Phony public hospital paid Feds $14M to settle fraud charges

A hospital in Georgia paid $13.9 million to settle allegations that it submitted false claims to the state's Medicaid program, the U.S. Justice Department announced on Wednesday.

The settlement involves allegations that John D. Archbold Memorial Hospital in Thomasville, Ga., lied to the Georgia Department of Community Health, claiming that it was a public hospital in order to qualify for higher payments from Medicaid.

Under Medicaid rules, only public hospitals can be part of the Medicaid Upper Payment Limit program. Despite its claim, Archbold Memorial is in fact a private hospital. As a result of its misrepresentation, the hospital raked in millions in funds it was not entitled to.

Mark Lowe, an Archbold spokesman, told Dow Jones Newswire that the hospital self-disclosed to the government the results of an internal investigation by a law firm that found that fake documents were submitted. In early 2008, then CFO William Sellers resigned after pleading guilty to charges related to his role in the scam, Lowe said. Former CEO Ken Beverly resigned in Febrauary 2008 and recently was convicted on charges relating to his involvement. "We sincerely regret this unfortunate incident; however, we worked closely with the authorities to resolve it appropriately," said Lowe.

As part of the whistleblower provisions of the False Claims Act, which allows private citizens to bring civil actions on behalf of the U.S. and share in any recovery, the whistleblower, Dr. Wesley Simms will receive $695,151 from the settlement.

To learn more:
- read the DOJ press release
- here's the Dow Jones Newswire article
- read the article on CEO Ken Beverly