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Imperial Valley hospital pays $2.2 million to settle Medicare fraud allegation

September 20, 2010 |  4:37 pm

The El Centro Regional Medical Center in Imperial County has paid $2.2 million to settle a civil action alleging that it defrauded the Medicare program, officials at the hospital and the Department of Justice said Monday.

The allegation was levied by a former employee of the hospital. Under the federal "whistleblower" provision, the former employee, Pietro Ingrande, will receive $375,000 from the settlement amount.

"We are committed to helping preserve the (Medicare) system's integrity by vigorously pursuing those who attempt to steal the funds that help keep our fellow Americans in good health," said Keith Slotter, special agent in charge of the FBI"s San Diego office.

David Green, chief executive of the 156-bed hospital, which is owned by the city of El Centro, attributed the incorrect billing not to attempted fraud but to lack of clarity in Medicare rules involving the distinction between outpatient care and in-patient treatment. Hospitals receive higher reimbursement for the latter.

"It is an unfortunate error in reporting and was unintentional," Green said, adding that changes have been made in the hospital's billing process.

Under the settlement, the hospital remains eligible for Medicare reimbursement but was required to sign a "corporate integrity agreement" involving review of how federal money is spent on healthcare.

The actual amount of the overbilling was not disclosed. Under federal rules for Medicare, hospitals caught overbilling can be charged up to three times the amount of the overcharge.

-- Tony Perry in San Diego