Facts

The Loma Linda University Behavioral Medicine Center (Loma Linda) in Redlands purportedly submitted its cost reports to Medicare and Medi-Cal from 1992 through 1996.

The United States of America, the state of California, and Mark S. Razin, a former consultant with Healthcare Financial Advisors, filed suit against Loma Linda under the qui tam provisions of the federal and state False Claims act, arguing that Loma Linda inflated its costs reports.

PLAINTIFFS' CONTENTIONS:
The plaintiffs argued Loma Linda charged the state and federal governments for non-billable services that were not covered by Medicare and Medi-Cal. Examples of such services included outpatient meals, start-up costs for an abandoned project, and an employee assistant program for non-hospital employees. The plaintiffs claimed Loma Linda had two cost reports: an accurate one for in-house use; and an inflated one that was submitted.

DEFENDANT'S CONTENTIONS:
Loma Linda challenged the allegations, claiming it did nothing wrong and all of its cost reports were accurate and proper.

Damages

The plaintiffs sought unspecified damages for the amount of the wrongly claimed costs.

Result

The case settled for $2,049,451, including prejudgment interest, while the case was still in the investigatory stage.