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Feds ding county for $6.8M
March 13, 2009, 12:00 AM By Michelle Durand

San Mateo County will pay the U.S. government $6.8 million to settle allegations its public hospital inflated the bed count to receive unwarranted payments from the Medicare and Medicaid programs between 1997 and 2007, the Department of Justice announced Thursday.

The decision to settle rather than fight the case was "economic,” said Deputy County Counsel John Nibbelin.

"The county specifically denies any wrongdoing and purposely doing anything fraudulent,” Nibbelin said.

Had the county lost, the amount paid could have been more substantial, Nibbelin said.

The government claimed the county-run San Mateo Medical Center falsely inflated its bed count to receive higher payments under Medicare’s Disproportionate Share Hospital  adjustments. The adjustment is an extra Medicare payment to hospitals meeting certain requirements, such as having more than 100 acute care beds. The hospital was also accused of improperly receiving federal Medicaid money for patients at the Institutes of Mental Disease. Those services are ineligible but San Mateo County allegedly did not report them separately. The settlement "demonstrates the governments ongoing commitment to protect the integrity of federal health care programs,” Acting Assistant Attorney General Michael F. Hertz said in announcing the settlement.

The county, however, was not required to admit any wrongdoing as part of the settlement.

"Bed count regulations are quite complex and nobody should take away from this that the county agrees with [inflating numbers],” Nibbelin said.

Former county employee Ronald M. Davis filed the allegations under the whistleblower provisions of the False Claims Act which allows individuals to sue on behalf of the United States and receive a piece of any settlement awarded. Davis will receive $1.2 million.

Davis was a compliance officer whom Nibbelin pointed out did not raise the concern prior to filing the allegations.

The county has already paid the $6.8 million but the settlement was under seal until yesterday, Nibbelin said.


Michelle Durand can be reached by e-mail: or by phone: (650) 344-5200 ext. 102. 

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