Christus Health Systems Pays Nearly $1 Million to Settle Medicare Fraud Charges by Whistleblower

Oct 06, 2010, 14:19 ET from Phillips & Cohen LLP

LOS ANGELES, Oct. 6 /PRNewswire/ -- Christus Health Systems, a hospital chain based in Houston, Texas, has agreed to pay the federal government $970,987 to settle whistleblower allegations that it had engaged in Medicare fraud by billing Medicare for ineligible costs and expenses and failing to disclose overpayments.

The settlement by Christus, which operates more than 40 hospitals and facilities in eight states, resolves the whistleblower's "qui tam" lawsuit that alleged fraudulent Medicare billings as far back as 1988 while others occurred as recently as 2001. The lawsuit had been "under seal" and not known to the public until Tuesday, when a federal district court judge in Los Angeles unsealed the case.

"Healthcare providers must disclose to Medicare any overpayments that result from reimbursement errors," said Mary A. Inman, a San Francisco attorney with Phillips & Cohen LLP, which represents the whistleblower. "The Medicare system depends on the honesty of hospitals and other healthcare providers. They shouldn't be trying to game the system."

The whistleblower, Mark Razin, was an employee of Healthcare Financial Advisors Inc. The company worked with hospitals on their cost reports to maximize Medicare reimbursement. Healthcare Financial Advisors also encouraged hospitals to reopen previous years' cost reports to make adjustments – many of them fraudulent -- and resubmit them to increase their Medicare reimbursements.

Some Christus hospitals wrongly billed Medicare for advertising and marketing costs and certain administrative costs, for instance. Christus also failed to disclose errors made by a fiscal intermediary that reviewed the cost reports for Medicare, which resulted in overpayments to the hospitals.

Christus facilities are located in Texas, New Mexico, Arkansas, Louisiana, Oklahoma, Utah, Missouri, Georgia, and Mexico.

Razin filed his "qui tam" (whistleblower) lawsuit in 1998 in federal district court in Los Angeles against the Christus hospitals and many other former clients of Healthcare Financial Advisors, which was acquired by Certus in 1998. The government has recovered $62.9 million as a result of Razin's qui tam case.

"I particularly want to acknowledge the work of Assistant U.S. Attorney Shana T. Mintz and Jeff McVicker of the U.S. Attorney's Office in Los Angeles," attorney Inman said. "Their skill and diligence helped taxpayers recover Medicare funds that otherwise would have been lost to fraud."

Phillips & Cohen represents whistleblowers nationwide in qui tam cases and in claims made under the Internal Revenue Service and the Securities and Exchange Commission whistleblower reward program involving tax law and securities law violations. Phillips & Cohen's whistleblower cases have recovered more than $6.89 billion in civil settlements and related criminal fines and have earned its clients more than $730 million in rewards. For more information, see

SOURCE Phillips & Cohen LLP