St. Elizabeth Regional Medical Center of Lincoln, Nebraska has paid the federal government and State of Nebraska $4 million to settle allegations that it knowingly failed to disclose and failed to return overpayments made by the federal Medicare and the Nebraska Medicaid programs.
The suit began as a qui tam action under the whistleblower provisions of the False Claims Act. The whistleblower, Mark Razin, is a former employee of Healthcare Financial Advisors, a consulting firm that assisted hospitals in preparing cost reports that were submitted to the Medicare and Medicaid health insurance programs. Mr. Razin was represented by the law firm of Phillips & Cohen.
The lawsuit alleged that HFA helped its hospital clients seek reimbursement for unallowable costs and helped conceal known overpayments from the government. The lawsuit specifically alleged that HFA helped clients reopen previously filed cost reports to seek reimbursement for various categories of costs that it had inadvertently failed to claim in its original cost reports, while simultaneously concealing from the Medicare or Medicaid programs overpayments the hospitals knew they had received on account of the original cost reports.
The settlement with St. Elizabeth is the latest of a series of settlements with defendants in the qui tam suit. In 2005, Eisenhower Medical Center, paid the federal government $8 million to resolve allegations that it submitted false claims in Eisenhower’s 1990 through 1998 Medicare cost reports (see: http://www.usdoj.gov/usao/cac/pr2005/123.html). In 2004, HealthSouth Corporation paid the federal government $736,410 to resolve allegations that it submitted false claims in HealthSouth Bakersfield’s 1992 Medicare cost report (see: http://www.usdoj.gov/opa/pr/2004/December/04_civ_807.htm). In 2002, Lovelace Health Systems, a New Mexico hospital and health maintenance organization owned by Cigna Corporation, paid the federal government $24.5 million to resolve allegations that it submitted fraudulent claims in 10 years of Medicare cost reports and reopening requests (see: http://www.usdoj.gov/usao/cac/pr2002/167.html). Also in 2002, St. Joseph’s Hospital in Houston, one of the CHRISTUS chain of hospitals, paid $1,569,000 to resolve allegations that it knowingly failed to disclose an overpayment made by the federal Medicare program (see: http://www.usdoj.gov/usao/cac/pr2002/041.html).
Most of this information is from the press release issued on October 30, 2006 by the U.S. Attorney’s Office for the Central District of California.