Dignity Health pays $37 million to settle lawsuit

A large hospital chain based in Northern California has agreed to pay $37 million to settle allegations that it overcharged the federal Medicare program.

The U.S. Attorney’s office in San Francisco announced the settlement Thursday. San Francisco-based Dignity Health was accused of admitting patients to 13 of its hospitals for procedures that could have been performed less expensively in an outpatient setting. The company’s hospitals submitted inflated bills for installing pacemakers, stents and other relatively minor procedures between 2006 and 2010.

The hospital chain has also agreed to hire an independent auditor to review its Medicare claims before they are submitted to the government.

The settlement arises from a whistleblower lawsuit filed by a former Dignity employee, who will receive about $6.25 million.

The chain’s hospitals in California include Dominican Hospital in Santa Cruz.