Arizona-based Banner Health will pay more than $18 million to resolve allegations that its hospitals knowingly submitted false Medicare claims, the Department of Justice announced April 12.

The settlement stems from claims that 12 of the system’s hospitals in Arizona and Colorado overcharged Medicare patients from 2007 to 2016. The hospitals admitted patients that could have received cheaper outpatient treatment, the department alleged.

The DOJ also alleged the hospitals inflated the number of outpatient observation care hours in reports to...