San Mateo County: The Bed-Count and IMD Funding Allegations

The San Mateo County fraud case ended in a $6.8 million settlement agreement over allegations of inflated Medicare bed counts and ineligible federal Medicaid funding for psychiatric patients. A former county employee brought the case. The government alleged that information about the facility and its patients changed which federal money came in.

The Department of Justice announced the agreement on March 12, 2009. San Mateo County agreed to pay the United States to resolve allegations involving San Mateo Medical Center’s Medicare claims and the county’s Medicaid funding. The settlement covered conduct from 1997 through 2007.

The Alleged Bed-Count Inflation Behind Higher Medicare Payments

The Medicare allegation concerned the Disproportionate Share Hospital adjustment, an extra payment to qualifying hospitals. In describing this case, the Justice Department identified a requirement of 100 or more acute care beds. It alleged that San Mateo Medical Center falsely inflated the bed count it reported to Medicare to receive higher payments under that adjustment.

That puts a hospital’s operating information at the center of the payment claim. Here, according to the government’s allegation, the count helped determine whether the hospital qualified for extra money.

For a hospital finance or operations employee, we would start with the connection between the count used inside the hospital and the count submitted for payment. Which beds went into the reported total, how that total reached Medicare, and who approved it are the questions that make the allegation intelligible. Someone who knows how the hospital counted its beds may see a discrepancy that the payment figure alone cannot explain.

The government’s allegation is that the hospital grew on paper, and the extra money followed. We see a bill for federal taxpayers in that alleged inflation.

Why the County Had to Report IMD Services Separately

The Medicaid allegation concerned federal funding for services to patients at institutions for mental diseases who were between the ages of 22 and 64. The Justice Department said those services were ineligible for federal funding and that San Mateo County had to report them separately to the California Department of Mental Health. That separate reporting allowed the state to keep federal money out of the payments.

Medicaid, known as Medi-Cal in California, combines federal and state funding. That financing structure explains why the separate report mattered. The county’s information had to reach the state in a form that identified services federal funds could not pay for. The government alleged that the county improperly obtained the federal payments anyway.

The Medicaid regulation’s definition of an institution for mental diseases concerns a facility with more than 16 beds primarily engaged in diagnosing, treating or caring for people with mental diseases. Its overall character determines the category. A facility’s name on a sign cannot answer that question by itself.

A worker who knows both sets of records can help distinguish the hospital’s capacity claim from the county’s obligation to identify particular patient services.

The Medicaid theory reached the services and their source of funding. It connected the patient’s age, the institution where care occurred and the county’s reporting to the state. For an insider, that means the important account may sit in the payment reporting process as much as in the treatment chart.

When the Facility and the Claim Tell Different Stories

In a separate complaint involving Universal Health Services, the government alleged that Keystone Marion Youth Center was presented as residential psychiatric treatment while operating as juvenile detention.

The allegation against San Mateo County concerned a different funding boundary: services to IMD patients that the county had to identify separately. The comparison shows why we follow a facility’s description through to the money. What the operation actually was, what the payer was told and what the payer funded belong in the same account.

How Much of a Settlement Does a Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In San Mateo County’s case, the Justice Department announced that the former county employee would receive $1.02 million as a share of the settlement proceeds.

The employee brought the allegations through a qui tam case under the False Claims Act.

What Evidence Is Needed to Prove Fraud?

Bed records, patient eligibility information and payment reports can connect a health care operation to what the government was told and paid. We examine those connections with the insider who knows the process.

If your work involves bed records, patient eligibility or payment reporting, your knowledge may explain where those accounts diverge. We would want to understand the records you know, the decisions you saw and how information moved from the facility into a claim or funding report. That gives us a way to examine responsibility as well as the discrepancy itself.

A hospital employee may recognize the capacity being claimed. A county employee may understand which services should have appeared separately in the state report. We work with you to connect that view of the operation to the government payment, keeping the Medicare and Medicaid questions distinct. Your experience inside the process is where that conversation starts.

You Know How the Numbers Reached the Claim

If you saw hospital bed counts or psychiatric funding reports that misrepresented the operation you knew, speak to one of our whistleblower experts about how those numbers reached the claim. We develop the case with you and bring in healthcare fraud whistleblower lawyers who understand hospital payments and Medicaid funding. From the first conversation onward, we stay beside you to build your strongest healthcare whistleblower case.