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RALEIGH, NC (AP) — Federal prosecutors say a Raleigh hospital has agreed to pay nearly $2 million to settle allegations it overbilled Medicare by ordering higher-cost services for patients who only needed outpatient treatment.

The US Justice Department said Monday that Rex Healthcare agreed to settle without admitting liability.

The government said between 2004 and 2007 Rex Healthcare routinely classified claims to Medicare as inpatient admissions to increase what it could charge for what were minimally invasive procedures.

A hospital spokeswoman had no immediate comment on the settlement.

The allegations came after a pair of whistleblowers filed a 2008 lawsuit in Buffalo, NY, under a federal law that allows people who know about fraud against the government to bring a case and share in any money recovered.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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