PennMedicineHUP-2
Credit: Madison Valerio

A network of Pennsylvania hospitals has filed a class action law suit against a Penn-affliated hospital for fraud. The lawsuit, filed on May 22nd, alleges that the hospital had submitted invalid claims to receive a total of $9 million from a state-funded program.

According to Law360, St. Luke's Health Network claims that Lancaster General Hospital knowingly submitted "bogus claims" to the Extraordinary Expense Fund. The EEF program was created in 2001 to provide funding to hospitals that serve uninsured and low-income residents. 

Law360 reports that the complaint cites a 2014 auditor's report that found that between 2010 and 2012, 75 percent of the claims that Lancaster General Hospital submitted to the EEF were overblown or invalid. The complaint says that this rate of invalid claims was much higher than that of other hospitals, which averaged around 10 percent. 

According to Law360, the complaint also states that during that time frame, the $9 million that Lancaster General received in invalid claims accounted for over 25 percent of the total $32 million distributed. Due to Lancaster General’s "scheme," St. Luke's alleges that it lost out on more than $580,000, Leigh Valley Business reports.

"We believe that the allegations by St. Luke's are without merit, and past findings by the commonwealth on this issue support [their] position," Lancaster General said in a statement reported on Law360.

Lancaster General has been a member of the University of Pennsylvania Health System since 2015. Because of this affiliation, Penn Medicine and the University's trustees are also named in the suit.

All comments eligible for publication in Daily Pennsylvanian, Inc. publications.