Long-term healthcare facility to pay $21M+ for False Claims Act violation in Medicare billing.

Cornerstone Healthcare Group Holding Inc. and CHG Hospital Medical Center LLC, also known as Cornerstone Hospital Medical Center, recently agreed to pay more than $21 million to settle allegations that they violated the False Claims Act by improperly billing Medicare.

Cornerstone Medical Center, located in Houston, offered extended medical and rehabilitative care to individuals who qualified as clinically complex and possessed multiple acute and/or chronic conditions. The facility is no longer in business.

The case was initiated by a qui tam (whistleblower) lawsuit filed under seal by an employee of Cornerstone Medical Center. While working there, they observed several incidents, including unlicensed and unauthorized students performing medical procedures and then fraudulently billing Medicare for these improper services.

Additionally, Cornerstone Medical Center allegedly submitted claims for payment for services physicians supposedly provided, when those physicians were in fact out of the country and could not have performed the services. Moreover, record show that for six years Cornerstone Medical Center billed for services that were not only inadequate based on the patients’ diagnoses, but also deemed harmful for them.

In the government’s press release, the FBI Special Agent in Charge stated “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. … Not only did Cornerstone Healthcare bilk the Medicare program out of millions of dollars, it also took advantage of its patients who were unknowingly used for its scam. These patients trusted their doctors and healthcare providers and ultimately received little to no care. At the end of the day, health care fraud affects everyone. It raises our health insurance premiums and exposes patients to worthless and unnecessary medical procedures.”

Healthcare providers who submit false claims to Medicare not only violate the False Claims Act but also undermine the integrity of the healthcare system. Improper billing practices can result in patients receiving unnecessary medical treatment and can drive up healthcare costs for everyone.

Under the False Claims Act, a private individual can file a lawsuit on behalf of the government and if the suit is successful the whistleblower may be eligible to receive between 15% and 30% of the government’s total recovery. In this case, the whistleblower will receive over $4 million. Read more about it here.