New Mexico hospital, partner, pay $12.24 million in Medicaid fraud case

by Ben Vernia | September 5th, 2017

On September 1, the Department of Justice announced that CHRISTUS St. Vincent Regional Medical Center of Santa Fe, New Mexico, and its Texas-based partner, would pay $12.24 million to settle a whistleblower’s allegations that the two companies defrauded the government through mischaracterizing payments made to the hospital in seeking matching federal funds.

CHRISTUS St. Vincent Regional Medical Center (St. Vincent) and its partner, CHRISTUS Health (CHRISTUS), have agreed to resolve allegations that they violated the False Claims Act by making illegal donations to county governments, which were used to fund the state share of Medicaid payments to the hospital, the Department of Justice announced today. Under the settlement agreement, St. Vincent and CHRISTUS have agreed to pay $12.24 million, plus interest. St. Vincent is located in Santa Fe, New Mexico. CHRISTUS is based in Irving, Texas.

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New Mexico’s Sole Community Provider (SCP) program, which was discontinued in 2014, provided supplemental Medicaid funds to hospitals in mostly rural communities. The federal government reimbursed the state of New Mexico for approximately 75 percent of its health care expenditures under the SCP program. Under federal law, New Mexico’s 25 percent “matching” share of SCP program payments had to consist of state or county funds, and not impermissible “donations” from private hospitals. This restriction on the use of private hospital funds to satisfy state Medicaid obligations was enacted by Congress to curb possible abuses and ensure that states have sufficient incentive to curb rising Medicaid costs.

Between 2001 and 2009, St. Vincent and CHRISTUS allegedly made non-bona fide donations and thus caused the presentment of false claims by the state of New Mexico to the federal government under the Medicaid program.

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DOJ announced that the qui tam relator, former Indigent Healthcare Administrator for a New Mexico county, will receive $2.249 million from the settlement (approximately an 18.3% relator’s share).

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