WASHINGTON – Our Lady of Lourdes Healthcare Services, Inc., the parent company of two New Jersey hospitals, has agreed to pay $7.95 million to resolve allegations that the hospitals defrauded Medicare.

The Justice Department alleges that Our Lady of Lourdes Medical Center (OLL) in Camden, N.J., and Lourdes Medical Center of Burlington County (LMC) in Willingboro, N.J., inflated charges to Medicare patients to obtain enhanced reimbursement.

In addition to its standard payment system, Medicare provides supplemental reimbursement, called "outlier payments," to hospitals and other healthcare providers in cases where the cost of care is unusually high. The lawsuit alleged that the hospitals inflated charges to obtain supplemental outlier payments for cases in which outlier payments should not have been paid.

"As the settlement demonstrates, the Department of Justice is committed to pursuing those who defraud Medicare and drive up the costs of healthcare," said Assistant Attorney General Tony West, head of the Civil Division of the Department of Justice.

"This office is committed to protecting the Medicare Trust Fund from fraud and abuse," said Paul J. Fishman, U.S. Attorney for the District of New Jersey.

The suit was brought by Tony Kite in 2005 under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. Under the civil settlement, Kite will receive $356,000, plus interest.