July 19, 2021
FOR IMMEDIATE RELEASE
Shore Health System, Inc., had been overbilling government health care programs from 2014 to 2018
BALTIMORE, MD — National plaintiffs firm Cohen Milstein Sellers & Toll announced today that the Maryland U.S. Attorney’s Office and the State of Maryland reached a nearly $9.5 million settlement with Shore Health System, Inc. (Shore Health) to resolve False Claims Act allegations filed by a whistleblower. Shore Health, a subsidiary of the University of Maryland Medical System that operates two hospitals and several non-hospital outpatient centers located on Maryland’s Eastern Shore, was alleged to have overcharged the Medicare and Maryland Medicaid programs between 2014 and 2018 for services provided to Medicare beneficiaries. Cohen Milstein Sellers & Toll represented the whistleblower who brought forward the case.
The whistleblower filed the civil lawsuit in the U.S. District Court for the District of Maryland in 2016. The case is captioned The United States of America and The State of Maryland ex rel. J. Doe v. Shore Health System, Inc., Civil No. CCB-16-2605 (D. Md.), and was unsealed on Friday by U.S. District Judge Catherine C. Blake.
“This settlement is a reminder about the important role that whistleblowers play in identifying and rooting out fraud in the healthcare industry,” said Gary Azorsky, co-lead counsel for the whistleblower and Co-chair of Cohen Milstein’s Whistleblower/False Claims Act Practice Group. “This case would not have been possible without this brave individual coming forward and reporting this improper billing practice to the government.”
“Our client is a person of strong integrity, who, by coming forward, brought an end to Shore Health’s practice of overcharging Medicare and Maryland Medicaid,” said Casey Preston, co-lead counsel for the whistleblower and also a member of Cohen Milstein Sellers & Toll PLLC’s Whistleblower/False Claims Act practice group. “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.”
The system for compensating Maryland hospitals for services furnished to Medicare beneficiaries is unique. Under Maryland’s system, the Maryland Health Services Cost Review Commission (HSCRC) sets the amount that the federal Medicare program pays for inpatient and outpatient services furnished to Medicare beneficiaries at Maryland hospitals and affiliated health care facilities that are located on the campus of a hospital. The HSCRC does not have authority to set the rates Medicare pays for outpatient services provided to Medicare beneficiaries at hospital-owned outpatient centers that are off the hospital’s campus. The HSCRC’s reimbursement rates for outpatient services furnished at Maryland hospitals are generally higher than the rates Medicare pays for outpatient services.
The qui tam lawsuit alleged that since mid-2014, Shore Health had been billing Medicare for outpatient services furnished at its non-hospital facilities as though the services had been provided at one of its hospitals, causing Medicare to pay it the higher HSCRC reimbursement rates for services. According to the whistleblower, Shore Health continued billing for services provided at its non-hospital centers at the higher HSCRC rates even after the health system’s leaders were notified that Medicare was overpaying for services provided at the non-hospital centers. In total, Shore Health overbilled Medicare and Maryland Medicaid by approximately $9.5 million.
The United States settled the federal government’s claims in June 2019, and the State of Maryland subsequently settled the State’s claims in June 2021. The U.S. District Court ordered that the action be unsealed on July 16. In settling, Shore Health did not admit liability.
The federal False Claims Act and its state law equivalents permit private citizens to bring lawsuits on behalf of the government against persons who present false or fraudulent claims for payment under government contracts or programs, such as Medicare, Medicaid, TRICARE, and the FEHB Program. Whistleblowers, like the individual who brought this lawsuit, are entitled to receive a portion of the proceeds of any settlement or judgment awarded against a defendant.
Joining Gary Azorsky and Casey Preston as co-lead counsel representing the whistleblower is Jeanne Markey, who with Azorsky serves as co-chair of Cohen Milstein’s Whistleblower/False Claims Act practice group.
Cohen Milstein’s Whistleblower/False Claims Act practice group has decades of experience successfully pursuing whistleblower cases under the federal and state false claims act statutes in the health care, pharmaceutical, and defense contractor industries, and in other industries that transact business with the government. In 2016, they represented one of two whistleblowers in United States et al. ex rel. Lauren Kieff v. Wyeth, which resulted in one of the largest qui tam settlements in U.S. history – Wyeth agreed to pay $784.6 million to the U.S. government and the over 35 intervening states.
Learn more about Cohen Milstein’s Whistleblower practice.
About Cohen Milstein
Cohen Milstein Sellers & Toll PLLC is a national leader in plaintiff class action lawsuits and litigation. As one of the premier firms in the country handling major complex cases, Cohen Milstein, with 90 attorneys, has offices in Washington, D.C., Chicago, IL, New York, NY, Philadelphia, PA, Palm Beach Gardens, FL, and Raleigh, NC. For more information, visit http://www.cohenmilstein.com or call 267.479.5700.