Children’s Hospital to Pay $12.9M to Settle False Claims; Whistleblower to Get $1.9M

Washington, D.C.-based Children’s Hospital and Children’s National Medical Center Inc. and its affiliated entities (CNMC) have agreed to pay $12.9 million to resolve allegations that it knowingly submitted or caused the submission of false claims to the Department of Health and Human Services (HHS) and state Medicaid programs, the U.S. Department of Justice announced today.

According to the settlement agreement, CNMC misstated information on cost reports and applications in two distinct manners to HHS.  This false information was used by HHS and Medicaid programs to calculate reimbursement rates to CNMC.  The United States contended that CNMC misreported its available bed count on its application to HHS’ Health Resources and Services Administration under the Children’s Hospitals Graduate Medical Education (CHGME) Payment Program.  The CHGME Payment Program provides federal funds to freestanding children’s hospitals to help them maintain their graduate medical education programs that train pediatric and other residents.  The United States further contended that CNMC filed cost reports misstating their overhead costs, resulting in overpayment from Medicare and the Virginia and District of Columbia Medicaid programs.

The settlement resolves allegations brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by James A. Roark Sr., a former employee of CNMC.  Under the act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is entitled to intervene in the lawsuit, as it did here.  As part of the resolution, Mr. Roark will receive $1,890,649.98.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.