March 14, 09

NEWS / San Mateo County, California, to Pay U.S. $6.8 Million to Resolve False Claims Allegations

Settlement Resolves Allegations Against San Mateo County Medical Center

WASHINGTON - San Mateo County, Calif., has agreed to pay the United States $6.8 million to resolve allegations that the San Mateo Medical Center (SMMC) submitted false claims to the United States in connection with payments from the Medicare and Medicaid programs, the Justice Department announced today.

The government alleges that SMMC falsely inflated its bed count to Medicare in order to receive higher payments under Medicare’s Disproportionate Share Hospital (DSH) adjustment. The DSH adjustment is an extra Medicare payment available to hospitals that meet certain requirements, including having 100 or more acute care beds.

In addition, the government alleges that San Mateo County improperly obtained federal payments under the Medicaid program for services provided to patients at Institutes of Mental Disease (IMDs) who were between the ages of 22 and 64. Such services are ineligible for federal funding, and San Mateo County was required to separately report them to the California Department of Mental Health so that the state could ensure that no federal funds were used to pay for them. Medicaid (known as Medi-Cal in California) is a program funded jointly by federal and state funds. The settlement covers conduct from 1997 to 2007.

The settlement resolves allegations that were filed in San Francisco by Ronald M. Davis, a former employee of San Mateo County. The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private individuals called "relators" to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant. The relator in this action will receive $1,020,000 as his statutory share of the proceeds of this settlement.

"Today’s settlement demonstrates the government’s ongoing commitment to protect the integrity of federal health care programs," commented Acting Assistant Attorney General Michael F. Hertz.

The settlement was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division; the U.S. Attorney’s Office for the Northern District of California, Affirmative Civil Enforcement Unit; and the U.S. Department of Health and Human Services, Office of Inspector General.

Assistant U.S. Attorney Sara Winslow handled the matter on behalf of the U.S. Attorney’s Office, with the assistance of Legal Assistant Kathy Terry, together with Civil Division attorney Arthur S. Di Dio. Auditor Jeff McVicker of the U.S. Attorney’s Office for the Central District of California also assisted in the matter.