In the News

Shore Health Pays $9.5 Million Settlement After Alleged Medicare, Medicaid Overpayments


August 15, 2021

Following a lengthy federal lawsuit, University of Maryland Shore Regional Health returned nearly $9.5 million in overpayments to Medicare and Maryland Medicaid to resolve alleged False Claims Act violations in June.

The civil lawsuit was originally filed in July 2016 after a whistleblower brought forward claims that Shore Health allegedly overcharged Medicare and Maryland Medicaid programs between 2014 and 2018 for services provided to their beneficiaries. The federal False Claims Act and its state equivalents allow private citizens like the whistleblower to file lawsuits on behalf of the government for false or fraudulent payment claims under government programs.

Shore Regional Health, which runs two hospitals and several outpatient centers on the Eastern Shore, is a part of the larger University of Maryland Medical System. The health system provides many services to patients covered with Medicare or Medicaid across the Eastern Shore.

The original complaint alleged that since June 2014, Shore Health had been improperly billing Medicare for outpatient services provided at unregulated facilities by using a provider transaction access number (PTAN) — a Medicare-assigned number to authenticate a provider — designated for use by a regulated facility.

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The Maryland U.S. Attorney’s Office and the state of Maryland reached the $9.5 million settlement with Shore Health in June 2021, which Shore Health voluntarily paid. The hospital and health care system did not admit liability for the over-billing in the settlement.

The whistleblower was represented by the Whistleblower/False Claims Act practice group of Cohen Milstein Sellers & Toll, a national firm handling plaintiff class action lawsuits and litigation.

Casey Preston, an attorney with Cohen Milstein and co-lead counsel for the plaintiff, described the whistleblower as “a person of strong integrity” for coming forward with the claims.

“We thank the District of Maryland’s U.S. Attorney’s Office and the Maryland Attorney General’s Office for their diligent and thorough investigation of our client’s allegations and for protecting taxpayers and government health care programs by recovering the substantial overpayments,” he said.

The case wouldn’t have been possible without the “brave individual” reporting the improper billing practice to the government, said Gary Azorsky, an attorney with Cohen Milstein and co-lead counsel for the plaintiff.

“This settlement is a reminder about the important role that whistleblowers play in identifying and rooting out fraud in the healthcare industry,” Azorsky said.