Corporate Compliance

NJ companies settle Medicare fraud allegations

Compliance Monitor, March 12, 2008

Two New Jersey-based companies agreed to million-dollar settlements to resolve allegations they defrauded Medicare, according to the Department of Justice (DOJ).

Besler & Company Inc.(BCI) and its principal, Philip Besler, and Cathedral Healthcare Systems Inc.(CHSI) wrongfully increased charges to make cases appear more costly and, thus, receive outlier payments from Medicare, the DOJ alleged.

Outlier payments are additional reimbursements Medicare pays to hospitals in cases where the cost of care is unusually high, enticing hospitals to treat high-cost patients.

BCI, a North Brunswick, N.J.-based consulting firm, agreed to pay almost $3 million after advising hospitals to improperly increase charges to Medicare between January 2001 and August 2003, according to a DOJ press release.

The agreement came just a day after CHSI, a Newark, N.J.-based hospital system, settled for more than $5.3 million to resolve similar allegations that occurred between January 1998 and August 2003, according to a DOJ release.

Three separate whistleblower lawsuits were brought against BCI and two against CHSI under the False Claims Act.

CHSI also entered into a corporate integrity agreement with the OIG.

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