Christus Health Systems pays nearly $1 million to settle Medicare fraud charges by whistleblower

LOS ANGELES, Oct. 6 -- Christus Health Systems, a hospital chain based in Irving, Texas, has paid 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 brought by Phillips & Cohen LLP 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.

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.

For more information about Phillips & Cohen's record, see P&C's Successful Whistleblower Cases.