Confidential
Settlement – $896,000Facts
Defendant company was a contingent fee retrospective billing operation which would retroactively revise hospital bills and impose supplemental charges which it then demanded that insurance companies pay. Many of these charges were false, in that they were for supplies and equipment never used for the patients. The defendant, which kept 30 - 35% of whatever it collected, concealed its involvement, using hospital billing forms, hospital letterhead, and ostensible hospital telephone numbers to accomplish this. Although the national average shows that bill audits might reveal 3 - 5% in overbilling by hospitals, the defendant managed to inflate hospital bills by $26 for every dollar of overbilling it found. Even though the defendant had a deliberate strategy of avoiding Medicaid bills, it failed to avoid inflating bills from other federal employee health insurance. The plaintiffs brought this action against the defendant based on the federal False Claims Act, 31 USC º3729 et seq., which prohibits submitting false bills or records to the United States. Relator alleged that false claims were submitted to various federal health programs, such as Tricare (formerly Champos) and the Federal Employee's Health Benefits Program.
Settlement Discussions
The plaintiff made a C.C.P. º998 settlement demand for $_______. The defendant made a C.C.P. º998 offer compromise for $_________.
Damages
$850,000 in false claims and monetary penalties.
Injuries
$850,000 in false claims and monetary penalties.
Other Information
The settlement was reached approximately two years after the case was filed. The whistleblowers received 19% of the government's share, or $161,500, plus $46,000 in statutory fees and costs. C.A.S.H. closed its business shortly after federal agents raided its offices, so the damages were paid by corporate hospital chains with which C.A.S.H. contracted. Relator and the United States asserted that the hospitals were liable because C.A.S.H. was their actual and ostensible agent.
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