St. Barnabas Corp., the largest private healthcare system in New Jersey and second largest employer in the state, agreed to reimburse Medicare $265 million to settle two federal lawsuits brought by three whistle blowers. St. Barnabas and nine of its hospitals were alleged to have inflated charges for inpatient and outpatient care to obtain outlier payments from Medicare from October 1995 to August 2003. Although federal investigators believe the fraudulent charges could have reached a half billion dollars, the U.S. Attorney for New Jersey wanted St. Barnabas to continue operating and, therefore, agreed to limit the penalty and allow it to be paid in six yearly installments, reports The New York Times. "[A]t some point we made a decision to go the route of civil settlement rather than criminal charges,” Ralph J. Marra Jr, first assistant U.S. attorney for New Jersey, said at a news conference. “We do not want to put them out of business, and so their ability to pay was a consideration in the settlement." The settlement, which is not an admission of guilt by St. Barnabas, also requires the hospital chain to have an outside monitor overseeing its Medicare billings for six years.
