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Silver Lake Hospital and Investors Pay $30 Million to Settle Health Care Case

Posted  January 22, 2024

Silver Lake Hospital, operating as Columbus LTACH in Newark, New Jersey, and certain investors recently agreed to pay a combined $30.6 million to settle False Claims Act allegations relating to Medicare payments and violations under the Federal Debt Collection Procedures Act (FDCPA).

Silver Lake is a long-term care hospital a whistleblower alleged was claiming excessive “cost outlier” payments from Medicare, a supplemental reimbursement for unusually high-cost care. The hospital reportedly inflated charges well above any cost increases, manipulating a system designed to ensure treatment for expensive inpatient care. In addition to the fraudulent Medicare cost reports, the settlement addresses allegations of fraudulent money transfers from the hospital to its investors, violating the FDCPA. These transfers reportedly occurred when the hospital was aware of its inability to repay its debts to the Medicare program.

This case underscores the importance of regulatory compliance in healthcare. Healthcare providers must ensure that their billing practices align with legal standards.

The resolution of this case was a result of collaborative efforts by the Justice Department’s Civil Division, U.S. Attorney’s Office for the District of New Jersey, the FBI, and the HHS-OIG. This cooperation highlights the government’s commitment to combating healthcare fraud and protecting taxpayer-funded healthcare programs.

“Medicare serves to ensure that patients get necessary care, including when that care is very expensive,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “Medicare is not there for hospitals and their investors to gain unwarranted financial windfalls. As alleged, this hospital falsely reported its costs to Medicare for years and reaped millions in unjustified payments. Along with our partners, this office is committed to protecting the Medicare system from all forms of fraud schemes.”

This settlement is a reminder of the consequences of failing to adhere to legal and ethical standards in healthcare. It serves as a cautionary tale for healthcare providers and investors, emphasizing the need for strict compliance with healthcare laws and regulations.

If you have information relating to potential fraud against the government and would like to speak to an experienced member of the Constantine Cannon whistleblower lawyer team, please don’t hesitate to contact us for a free and confidential consultation.  Maybe you can be the whistleblower who leads the government to the next big False Claims Act success.

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Tagged in: FCA Federal, Healthcare Fraud, Medicare,