St. Mary's Medical Center, which voluntarily disclosed that it had improperly billed Medicare, agreed to pay $3.28 million to resolve claims related to the billings, the United States Attorney Zane in Philadelphia, David Memeger, said.

The improper billings occurred between Oct. 1, 2001, and Sept 30, 2007, Memeger said. The hospital billed Medicare for more expensive one-day hospital admissions on an unspecified number of occasions when it should have billed for observations or outpatient visits, the U.S. Attorney's office said.

Because St. Mary's discovered the billing misbillings through an internal investigation and disclosed the problem, the hospital will be allowed to continue implementing its corporate compliance program without additional sanctions or oversight, the U.S. Attorney said. (Read the settlement here.)

"St. Mary strives to continuously improve processes, has updated its current practices to include staff compliance training programs, and has implemented changes in billing processes, where necessary, to address any concerns," the hospital said in a statement.   - Harold Brubaker