The U.S. Attorney’s Office for the Southern District of Texas announced on February 22 that Cornerstone Healthcare Group Holding Inc. and CHG Hospital Medical Center LLC. dba Cornerstone Hospital Medical Center will pay $21,637,512 to settle allegations that it improperly billed Medicare and violated the False Claims Act. The case stemmed from a qui tam whistleblower lawsuit filed in 2018 by someone who worked at Cornerstone Medical Center, “formerly a long-term acute care facility located in Houston that operated as a long-term care hospital.”
The qui tam provisions of the False Claims Act enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery, if one occurs.
According to the press release, “Cornerstone was in the business of providing extended medical and rehabilitative care to individuals who qualified as clinically complex and possessed multiple acute and/or chronic conditions. Through its subsidiaries, CHG Holding operated specialty hospitals throughout the United States, including Cornerstone Medical Center which is no longer in business.”
This case stemmed from a qui tam whistleblower complaint filed on September 28, 2018 by someone who used to work at the facility. While they were employed there, the whistleblower “witnessed, among other things, unlicensed, unauthorized students of Drs. Jorge Guerrero, Joel Joselevitz and Joseph Varon rendering medical procedures. These unauthorized and improper services were fraudulently billed to Medicare.”
Cornerstone Medical Center also allegedly “submitted claims for payment for services certain treating physicians allegedly rendered. However, records showed those physicians were actually out of the country and could not have performed the services.”
The press release states that an investigation found “from Jan. 1, 2012, through Dec. 31, 2018, Cornerstone Medical Center billed for services not supported by the patients’ diagnosis or medical records, and billed for services that were either not rendered or were so inadequate they were worthless (in some cases, resulting in harm to patients.) The claims for payment to Medicare for those services were deemed to be fraudulent and submitted in violation of federal law.”
The whistleblower in this case will receive $4,327,502.
“This $21.6 million settlement by Cornerstone Healthcare Group Holding is one of the largest civil healthcare fraud settlements FBI Houston has seen, and we work a lot of healthcare fraud cases. I hope this case sends a message to other healthcare providers who think they can get away with similar fraud,” said FBI Special Agent in Charge James Smith. Smith also pointed out that “[a]t the end of the day, health care fraud affects everyone.”
Health care fraud is one area in which the False Claims Act has been especially effective: in Fiscal Year 2022, “[s]ettlements and judgments under the False Claims Act exceeded $2.2 billion,” according to prior WNN reporting. Of that $2.2 billion, “over $1.7 billion related to matters that involved the health care industry, including drug and medical device manufacturers, durable medical equipment, home health and managed care providers, hospitals, pharmacies, hospice organizations, and physicians.” Health care fraud and schemes often harm the most vulnerable citizens and can erode trust in the medical system, so whistleblowers play a critical role in exposing this wrongdoing and saving taxpayers and patients money.