The Department of Justice has announced that Wheaton Community Hospital, the city of Wheaton, Minn., and Stanley Gallagher, MD, (collectively known as WCH) have agreed to pay $846,461 to settle a whistleblower suit charging that they violated the False Claims Act.

The claim alleged that between 1998 and 2004, WCH knowingly made false claims to Medicare regarding “unreasonable” and “unnecessary” hospital admissions, said the Justice Department’s civil division.

The lawsuit, originally filed under the qui tam, or whistleblower provisions of the False Claims Act in the federal court of Minnesota, was initiated by Steven Radjenovich, MD, a former practitioner at Wheaton Community Hospital, who previously worked with Gallagher. Radjenovich will receive $203,150 of the settlement with WCH.

The Justice Department's civil division, along with the U.S. Attorney's Office for the District of Minnesota and the Department of Health and Human Services' Office of the Inspector General, stated that WCH violated hospital admission practices by admitting some patients and keeping others admitted to acute care when not medically necessary. Subsequently, those unnecessary hospital stays were billed to Medicare for the cost of these hospital admissions.

"Hospitals and doctors have a responsibility to provide patients with reasonable and necessary care,” said Tony West, assistant attorney general for the Justice Department's civil division. “When they neglect those obligations, patients and taxpayers suffer."