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EastRidge to pay $500,000 in false claims settlement

April 07, 2004|by CANDICE BOSELY

martinsburg@herald-mail.com

MARTINSBURG, W.Va. - Martinsburg-based EastRidge Health Systems has agreed to pay $500,000 to settle allegations that the center submitted false claims to Medicare and Medicaid from 1995 to 1999, according to a news release from the U.S. Attorney's Office.

The settlement was reached more than a year after Valerie Stacy, a former employee of EastRidge, filed a lawsuit against EastRidge under the "whistle blower" provisions of the False Claims Act. That provision allows private individuals to sue on behalf of the U.S. government.

Stacy, who worked as a billing specialist at EastRidge from December 1995 until she was fired in May 1997, will receive an undisclosed portion of the settlement, U.S. Attorney Thomas E. Johnston said.

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"This settlement represents the United States' continued efforts to ensure that beneficiaries of federal health benefit programs receive care that complies with federal and state standards," Johnston wrote in the news release. "The settlement also demonstrates that we are committed to protecting federal health-care funds against depletion through fraud and abuse."

Jim Moore, executive director of EastRidge, could not be reached for comment. A secretary at EastRidge said Tuesday afternoon he was not in his office.

Moore took over EastRidge after the alleged false claims were filed, Johnston said.

In January, 2003, EastRidge attorney William Wilmoth said the company had made some mistakes, but many were clerical errors. He said EastRidge cooperated with investigators, opening up cabinets of records for them.

In her lawsuit, Stacy claimed that:

  • From May 1995 to October 1998, 17 claims were submitted to Medicare for services that require a physician, but during which no physician was present.

  • From July 1995 to December 1996, 235 claims were submitted to Medicare for services that were supposed to be rendered by a doctor, but were performed by clinical social workers or clinical psychologists.

  • From January 1996 to December 1997, 251 claims were submitted to Medicare for time-based work, but the time provided to patients was less than noted.

  • From January 1996 to December 1996, 530 claims were submitted to Medicare at a higher reimbursement rate than permitted.


Under Medicaid, from January 1995 to December 1997, 4,090 false claims were allegedly filed, according to the 16-page civil complaint.

The government also claimed that EastRidge submitted invoices to the Department of Health and Human Resources for revenue or expenses that were not covered under a block grant.

The federal government took over Stacy's lawsuit in January 2003. The lawsuit initially sought $2.4 million in damages as well as civil penalties.

EastRidge is a nonprofit corporation that provides mental health counseling, alcohol and drug treatment programs and crisis services in Berkeley, Morgan and Jefferson counties.

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