BALTIMORE (Legal Newsline) - Maryland Attorney General Douglas Gansler announced a settlement on Thursday, joined by the federal government, with Good Samaritan Hospital of Maryland Inc. to resolve allegations of Medicaid fraud.

Good Samaritan allegedly systematically and falsely reported many patients as suffering from malnutrition. Good Samaritan will pay $213,464.41 to the Maryland Medicaid program. Half of the fund will compensate the state for its portion on the allegedly fraudulently billed claims for Medicaid.

"This is fraud that robs from the taxpayers and those in need of proper health care," Gansler said. "In cases like this, we seek to make the taxpayer whole and send a message that ensures such conduct is never repeated."

Under the terms of the agreement, Good Samaritan will pay a total of $793,548 to Medicaid, Medicare and other federal health care programs. Good Samaritan allegedly falsely claimed that some of its patients were suffering from malnutrition in addition to the condition the patients were admitted to the hospital for between January 2005 and December 2008. The information the hospital provided was used by the Maryland Health Services Cost Review Commission to determine the hospital's payment rates.

By adding the malnutrition diagnoses, Good Samaritan allegedly made it appear as though its overall patient population rate was harder to treat. The appearance of more difficult treatments allowed the hospital to obtain an increase in its payment rates meant to compensate the hospital for increased resources required to treat its patients. The allegedly incorrect diagnoses included patients who were diagnosed with kwashiorkor, a rare malnutrition form typically seen in sub-Saharan African nations in which major poverty is common. The condition is very rare in the United States.

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