St. Luke's can sue Pennsylvania hospital accused of inflating reimbursements, court rules

Bethlehem, Pa.-based St. Luke's University Health Network can sue another Pennsylvania hospital accused of inflating its reimbursement claims under the federal Racketeering Influenced and Corrupt Organization Act, a federal appeals court ruled July 22.

With its ruling, the 3rd U.S. Circuit Court of Appeals has revived the lawsuit alleging Lancaster (Pa.) General Hospital obtained nearly $9 million in overpayments by inflating claims for reimbursement from a state fund that helps hospitals offset costs related to the treatment of uninsured or underinsured patients. 

St. Luke's, which filed the initial lawsuit in May 2018, alleged the inflated claims submissions took place from 2008 to 2012, and caused St. Luke's to lose out on reimbursement money.

The state fund for treating indigent patients was funded with money from Pennsylvania's share of a hefty settlement between the U.S. and the tobacco industry. The fund provides a small amount of money to hospitals each year to offset some of the costs of treating uninsured patients. 

A lower court decision dismissed the case last year, claiming that Lancaster General's move to inflate claims didn't cause St. Luke’s and other hospitals to lose reimbursement money, but instead it was the state's decision to stop chasing after organizations that were overpaid, according to The Morning Call. 

The appeals court reversed that decision, saying St. Luke's claims of fraud are sufficient to sue under the RICO Act.  

Read the full report here.


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