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Arizona hospitals to pay $35M to settle false claims

TUCSON, Ariz. -- Federal authorities say an Arizona nonprofit corporation has agreed to pay $35 million to resolve allegations that two of its Tucson hospitals submitting false claims to Medicare and other federal health care programs for nearly seven years.

The Carondelet Health Network does business in Tucson as Carondelet St. Mary's Hospital and Carondelet St. Joseph's Hospital.

Prosecutors say the two hospitals billed Medicare, the Federal Employees Health Benefit Program and the Arizona Health Care Cost Containment System for inpatient rehabilitation facility services that weren't properly reimbursable.

They say the patients weren't appropriate for inpatient rehabilitation facility services.

Prosecutors say the settlement resolves false claim allegations from the hospitals from April 7, 2004 through Dec. 31, 2011.

They say it also resolves a whistleblower's lawsuit that was filed in November 2011.

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