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ATLANTA (Legal Newsline) - Georgia Attorney General Sam Olens announced on Tuesday that his office has reached a $2.7 million civil settlement with a health systems company that allegedly defrauded Medicaid.

St. Joseph's/Candler Health System allegedly reported inaccurate Medicaid billing at two Savannah, Ga.-area hospitals for both inpatient and outpatient services.

The Georgia Medicaid Fraud Control Unit and the Department of Community Health utilized the auditing firm Myers & Stauffer to look into cross-over claims that were allegedly filed by the company.

Cross-over claims are those that are made on behalf of patients who are enrolled in Medicaid and Medicare. For those patients, Medicare provides primary coverage while Medicaid acts as secondary insurance.

A lawsuit against SJCHS alleged it had filed claims that did not reflect the full amount of Medicare prior payments, resulting in excessive Medicaid reimbursements.

"All instances of over billing as well as fraudulent billing in the state Medicaid system will be vigorously investigated by my office," Olens said. "Every dollar is critical as demand for Medicaid services is rising and public resources are scarcer than ever. Aggressive enforcement is the best tool we have to make certain that Georgia taxpayers are not overpaying for Medicaid services."

Under terms of the agreement, SJCHS will pay $2,717,370 to the Georgia Department of Community Health to cover all alleged billing errors. The company will also pay an additional $2,500 for costs associated with the litigation.

SJCHS denied any wrongdoing and cooperated with the state, implementing corrective actions to ensure that similar overbilling doesn't happen.

A similar settlement was reached in August with five WellStar hospitals for $2,738,000.