Yavapai Regional Medical Center (Yavapai), an Arizona health system, has agreed to pay the United States $5.85 million to resolve claims that it violated the False Claims Act by misreporting data about the hours worked by its employees on its annual cost reports, which in turn improperly inflated the amount of money it received from the Medicare program.

The settlement, announced October 4, 2016, resolves a lawsuit filed in April 2016 under the qui tam, or whistleblower, provisions of the False Claims Act.   The qui tam provisions allow private citizens to serve as whistleblowers and bring civil actions on behalf of the United States and share in any recovery that is made.  The whistleblower in this case will receive $1.17 million as his share of the $5.85 million settlement.

Specifically, the case alleged that between 2006 and 2009, Yavapai misreported the hours worked by its employees, which inflated the wage index for the Prescott, Arizona area.  This artificially inflated wage index was then used by the Medicare program when it calculated the payments it made to Yavapai.  The United States alleged that as a result of Yavapai’s false claims, Medicare overpaid $19.1 million to Yavapai Regional Medical Center during this time period.