Catholic medical center to pay $29 million after fraud allegations

SVCMC, Inc., formerly known as Saint Vincent’s Catholic Medical Centers of New York, will pay nearly $30 million to resolve accusations that the healthcare system knowingly accepted and concealed overpayments from a military insurance program. The Defense Health Agency’s Uniformed Services Family Health Plan severely miscalculated the capitated rates for Saint Vincent’s treatment of military members and their families, the Department of Justice shared in a Friday statement.

Saint Vincent’s took steps to conceal the overpayments and continued to submit invoices at the inflated rates, rather than notify the government of the error, the DOJ said. Any recipient of public funding, even health programs, must return any unnecessary funding, said the Justice Department’s civil division head acting Assistant Attorney General Brett A. Shumate. Saint Vincent’s was one of six programs that took part in the Uniformed Services Family Health Plan while knowingly accepting and hiding the receipt of inflated payments.

What other medical institutions were overcharging? The five other facilities within the U.S. Family Health Plan Alliance that allegedly hid the surplus payments included New England’s Brighton Marine Health Center and Maryland’s Johns Hopkins Medical Services Corporation. Maine’s Martin’s Point Health Care and Seattle’s Pacific Medical Center also allegedly took part in the scheme, along with the Texas not-for-profit CHRISTUS Health Services, according to the DOJ’s court filing last year.

The organizations reportedly learned of the inflation error in 2012 but never remedied the filings for years, the DOJ said. Kennell & Associates, the research firm responsible for developing and annually updating the rate-setting methodology, also recognized the errors and opted against reporting them to the government, the DOJ said. The Virginia research group agreed last year to pay about $780,000 to the U.S. government.