Georgia Department of Law, from the office of Samuel S. Olens, Attorney General


St. Joseph's/Candler Health Systems To Pay $2.717 Million To Settle Investigation Into Medicaid Billing

February 8, 2011

Attorney General Samuel S. Olens announced today that the State of Georgia has reached a $2.717 million civil settlement with St. Joseph’s/Candler Health System (SJCHS), relating to Medicaid billing for inpatient and outpatient services provided at its two Savannah-area hospitals.

This settlement follows an eleven month investigation by the Georgia Medicaid Fraud Control Unit (MFCU) and the Department of Community Health (DCH), with assistance from Myers & Stauffer, an auditing firm under contract with DCH.  The focus of the investigation was SJCHS’s billing for “cross-over” claims, which are claims made for patients who are enrolled in both Medicare and Medicaid.  Medicare acts as the primary coverage, with Medicaid functioning as the secondary insurance, and Medicaid has a cap on the amount of reimbursement that a hospital can receive.  The investigation found that SJCHS filed claims which did not reflect the full amount of Medicare prior payments, allowing SJCHS to receive excessive Medicaid reimbursements.

Under the terms of the agreement, SJCHS denied any wrongdoing, but agreed to pay the Georgia Department of Community Health a lump sum of $2,717,370.00 to settle all possible claims related to the billing errors.   SJCHS also agreed to pay an additional $2,500.00 to defray the costs of the investigation.   SJCHS cooperated fully with the State’s investigation, and implemented corrective actions to ensure that similar billing problems do not reoccur.

In announcing the settlement, Attorney General Olens said that “All instances of overbilling as well as fraudulent billing in the state Medicaid system will be vigorously investigated by my office.   Every dollar is critical as demand for Medicaid services is rising and public resources are scarcer than ever.  Aggressive enforcement is the best tool we have to make certain that Georgia taxpayers are not overpaying for Medicaid services.”  Olens went on to thank the Department of Community Health for their assistance in uncovering the Medicaid overbilling, and he promised that the investigation would continue into hospitals overbilling Medicaid where Medicare acts as the primary coverage.

“We are committed to protecting the integrity of the Georgia Medicaid program and aggressively addressing any identified fraud or abuse,” said Robert Finlayson, Georgia Department of Community Health’s Inspector General.  “Everyday, we strive to ensure tax payer dollars are being properly utilized to provide quality health care services for the Georgians we’ve been entrusted to serve.  I am proud of the collaborative efforts of my team and the Georgia Medicaid Fraud Control Unit for their exemplary work, dedication and diligence.  As we continue to review hospitals across the state for similar billing issues, I encourage hospitals that discover billing errors to report them to the Department immediately."

This settlement follows a similar settlement for $2.738 million reached last August with five WellStar hospitals, relating to similar issues.   Senior Assistant Attorney General Scott A. Smeal led the investigation, assisted by auditors and investigators with the Georgia MFCU. The investigation is ongoing with respect to other Georgia hospitals.