The Saint John’s Health Center in Santa Monica has agreed to pay the federal government $5.25 million as part of a settlement agreement regarding allegations that the hospital submitted false inflated claims to the Medicare program for “outlier payments.”

Medicare outlier payments are designed to compensate hospitals for certain services for which the cost of providing care to patients is significantly higher than the rate established for the patients’ diagnoses. Saint John’s officials say that reviews of outlier payments are not uncommon.

The United States Attorney’s Office had alleged that Saint John’s engaged in “turbocharging” by dramatically increasing the charges billed to Medicare for care provided to hospital inpatients that were far in excess of any increase in costs related to that care, a U.S. attorney spokesman said. By allegedly turbocharging from 1996 through 2003, Saint John’s was able to obtain significant amounts of Medicare outlier payments that it was not entitled to receive, the spokesman said.

Under the settlement agreement, Saint John’s agreed to resolve the allegations without an acknowledgment of wrongdoing. The hospital agreed to pay the $5.25 million settlement by Aug. 30.

Saint John’s officials said in a statement that the hospital worked cooperatively with the federal government throughout its review of the hospital’s past outlier payments and is pleased to have reached a conclusion on this matter.

“Saint John’s remains focused on our primary mission to provide breakthrough medicine and inspired healing to the communities we serve,” the hospital statement said.

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