WASHINGTON – Robert Wood Johnson University Hospital Hamilton has agreed to pay $6.35 million to settle allegations that it defrauded Medicare.

Two lawsuits filed against the Hamilton, N.J., hospital charge officials with inflating charges to Medicare patients to obtain larger reimbursements.

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. Federal investigators say the hospital inflated its charges to obtain supplemental outlier payments for cases that were not extraordinarily costly.

"Taxpayer dollars should go towards quality healthcare, not (be) wasted on fraud and abuse," said Tony West, assistant attorney general for the Civil Division of the Department of Justice.

The lawsuits were brought under the qui tam, or whistleblower, provisions of the False Claims Act. Under the civil settlement the whistleblowers will receive $1,111,250 of the settlement.

The False Claims Act has been used to recover approximately $2.3 billion since January 2009 in cases involving fraud against federal healthcare programs. Since 2006, the United States has recovered more than $1.1 billion from hospitals over outlier fraud charges.