Doctor’s Hospital 1997, doing business as United Memorial Medical Center (UMMC), an entity that formerly operated hospitals in the Houston, Texas area, has agreed to pay $2 million, and to make additional contingent payments, to resolve alleged False Claims Act violations.
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Doctor’s Hospital 1997 L.P. has agreed to pay $2 million, and to make additional contingent payments, to resolve alleged False Claims Act violations for claiming excessive cost outlier payments from government health care programs and for double billing the government for COVID-19 tests that were also billed either to the State of Texas or the City of Houston.
According to the settlement agreement between UMMC and the United States, the settlement funds will be paid by one of UMMC’s principals, Ravishanker Mallapuram, and UMMC has guaranteed the payment of those funds.
In addition to its standard payment system, Medicare and Tricare provide supplemental reimbursement to hospitals called “cost outlier†payments in cases where the cost of care is unusually high.
Congress enacted the supplemental outlier payment system to ensure that hospitals possess the incentive to treat inpatients whose care requires unusually high costs.
This settlement resolves allegations that UMMC submitted claims for cost outlier payments by rapidly increasing its charges for inpatient care and underreporting its charges on Medicare cost reports, thereby preventing the government health care programs from adjusting those charges so that they would reasonably reflect UMMC’s actual costs.
The settlement also resolves allegations that UMMC concealed and improperly avoided its obligation to reimburse the federal health care programs for any excessive outlier payments its hospitals received.
In addition, UMMC has agreed to settle allegations that it submitted claims to the Health Resources and Services Administration’s Uninsured Program for COVID-19 testing services, despite being reimbursed for those same services by either the State of Texas or the City of Houston.
The settlement resolves a lawsuit originally brought by Ryan Griffin, a former employee of UMMC, under the qui tam provisions of the False Claims Act.
The Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under the settlement announced yesterday, Griffin will receive $300,000.
This settlement was the result of a coordinated effort by the Justice Department's Civil Division; the U.S. Attorney’s Office for the Southern District of Texas; HHS, Office of Counsel to the Inspector General and Office of Investigations; DCIS and the FBI. ■