St. Mary Medical Center settles False Claims Act allegations with federal government for $2 million

The federal government announced this week that it has settled claims with

a suburban Philadelphia hospital arising from the facility’s improper administering of certain physician income guarantee agreements.

St. Mary Medical Center, which is based in Langhorne, Bucks County, had voluntarily disclosed the allegations, which triggered an ensuing investigation, and this week agreed to pay $2,339,224.70 to resolve the matter, according to the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

In the self-disclosure, St. Mary admitted that it failed to properly administer the terms of certain recruitment contracts for doctors, leading to net overpayments to some recruited physicians.

The medical institution had had 15 physician income guarantee agreements for recruited doctors, according to the government.

Because the physicians and their practices referred patients to St. Mary for medical treatment that was billed to federally funded programs, including Medicare and Medicaid, federal prosecutors alleged that false claims were submitted to the government.

Following the discovery of the problem, the medical facility took the appropriate steps to resolve the improper payments, and voluntarily disclosed the matter to the U.S. Attorney’s Office in Philadelphia, the government announced.

The hospital’s actions purportedly violated the federal False Claims Act.

The matter was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General.

Court papers show that St. Mary did not properly administer the physician income guarantee agreements with regard to the recruited doctors from April 1, 2007 through June 30, 2010.

The hospital subsequently failed to recover the overpayments.

St. Mary did not admit any criminal liability as part of the settlement agreement.

The agreement was signed by government lawyers as well as St. Mary Medical Center President and CEO Gregory T. Wozniak and the hospital’s counsel, John Joseph of the firm Post & Schell.