Corporate Compliance

Victory Memorial hospital settles whistleblower case for at least $2.3 million

Compliance Monitor, March 18, 2009

The United States has reached a $2.3 million settlement with Victory Memorial, a not-for-profit corporation that operated a full-service acute care hospital in Bay Ridge, Brooklyn, until May 2008, according to a Department of Justice press release.
The United States alleged that Victory Memorial’s cost reports for 1996 and 1997 understated certain revenues for patient care, known as “charges.” This allegedly resulted in a higher cost-to-charge ratio for those years, which allowed the organization to obtain higher reimbursements from Medicare. The United States further alleged that Victory Memorial officials failed to correct those submissions after Joseph Lee, a former employee, informed them of the inflated ratio.
According to the press release, the total settlement of the fraud claims could approach $2.8 million, depending on whether any Medicare underpayments exist in connection with certain annual filings the hospital submitted to Medicare for 2007 and 2008.
Lee filed the original suit under the qui tam provision of the False Claims Act, which allows private individuals to file false claims cases on behalf of the United States.

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