NM Hospital Pays $12.24 Million to Settle Medicaid Whistleblower Lawsuit

NM Hospital Pays $12.24 Million to Settle Medicaid Whistleblower Lawsuit

A hospital in New Mexico has agreed to pay $12.24 million to end a Medicaid whistleblower lawsuit alleging it violated the False Claims Act by improperly manipulating federal funding designed to reimburse hospitals for treating the poor.

The Medicaid whistleblower lawsuit accused Christus St. Vincent Regional Medical Center and its Texas-based parent company of engaging in a scheme involving the now-defunct Sole Community Provider Program, which primarily used Medicaid funds to reimburse hospitals by about 75 percent for treating the indigent population. The program required a matching share from state or county funds.

Hospital EntranceAccording to the Medicaid whistleblower lawsuit, Christus Health and Christus St. Vincent were allegedly making illegal payments to county governments to obtain federal matches from the government. The payments violated the law because “Congress expressly intended that states and counties use their own money when seeking federal matching funds,” said a statement released by the U.S. Attorney’s Office.

A news release from the Acting Assistant Attorney General from the Justice Department’s Civil Division stated: “Using local (public) funds provides an incentive for the counties and states to, among other things, hold down costs rather than rely on non bona-fide donations by private providers.”

The Medicaid whistleblower lawsuit was initiated by a former Los Alamos County Official, Diana Stepan, in 2011. Ms. Stepan passed away last year, but her estate will receive $2.4 million because the federal government investigated her complaint.

According to the Medicaid whistleblower lawsuit, the New Mexico hospital took over health programs for the indigent population in 2001 from Santa Fe County. The hospital paid the county to use its facilities, which the federal government reimbursed through Medicaid; however, the county then returned the payment as payments for its services.

“Stepan came to realize that St. Vincent’s donations to Santa Fe County were sham transactions designed and implemented specifically to bilk the federal treasury,” said the deceased whistleblower’s attorney in a statement. “She believed that rules should be followed and taxpayer funds protected.”

Under the terms of the settlement, Christus Health and Christus St. Vincent admit no liability, but say that they wish to settle the claims to avoid the expense of litigation.

“We have determined that continued expenditure of time and resources in defense of the allegations is not in the best interests of the Santa Fe community or the hospital,” said a hospital spokesman in a statement.

Medicaid Fraud and the False Claims Act

Under a law enacted during the civil war to prevent fraud against the army called the False Claims Act, whistleblowers are able to sue those defrauding the federal government. The False Claims Act has been an important part in stopping fraud and abuse of federal funding.

Under the False Claims Act, those knowingly submitted (or caused to be submitted) a false claim are in violation of the Act. Knowledge of false information includes actual knowledge as well as deliberate ignorance and reckless disregard for the truth.

Medicaid Whistleblower Lawsuits

If you work in a medical setting and have witnessed someone committing Medicaid fraud and have evidence of the illegal activity, you should consider filing a Medicaid whistleblower lawsuit.

Medicaid fraud steals money from the federal government and other needy programs. An experienced whistleblower attorney can help a courageous whistleblower hold guilty parties accountable for their fraudulent actions. An attorney can also ensure that the whistleblower receives a reward for their Medicaid whistleblower lawsuit.

If you are in the position of needing to file a Medicaid whistleblower lawsuit, you should consider hiring an experienced whistleblower attorney. The attorneys at Bradley/Grombacher are happy to provide a FREE case evaluation.

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