Inflated Cost Reporting

In addition to medical services, Medicare reimburses hospitals for other costs related to medical treatment including capital expenditures on machinery or new buildings.  Fraudulently inflating these costs to receive more money from the federal government may be a violation of the FCA.

Example

In 2007, the Loma Linda Behavioral Medicine Center agreed to pay the government over $2 million to settle a case under the FCA which alleged that the company submitted false cost reports to Medicare for reimbursement.  Specifically, the company sought reimbursement for start up costs for abandoned projects or other costs not related to patient care.  By manipulating and falsifying cost reports to inflate the reimbursement by Medicare, the company allegedly violated the FCA.