CHRISTUS Medical Center and CHRISTUS Health to Pay More than $12 Million to Settle Alleged False Claims Act Violations

Earlier this month, the Department of Justice announced that 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.  These funds were ultimately used to fund the state’s share of Medicaid payments to the hospital. The providers have agreed to pay $12.24 million, plus interest as part of the settlement. “Congress expressly intended that states and counties use their own money when seeking federal matching funds,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Using local funds provides an incentive for the counties and states to, among other things, hold down costs rather than rely on non bona-fide donations by private providers.”

Under a program known as the Sole Community Provider (SCP) program, the state of New Mexico was to provide supplemental Medicaid funds to hospitals in mostly rural communities. Thus a restriction on permissible donations was placed on private hospitals. The federal government reimbursed the state of New Mexico approximately 75 percent of its health expenditures under SCP.  The SCP program was created by Congress to curb possible abuses and to ensure that states had the means to curb rising Medicaid costs. The government alleges that between 2001 and 2009, St. Vincent and CHRISTUS allegedly made non-bona fide donations causing the presentment of false claims by the state of New Mexico to the Medicaid program. (New Mexico’s SCP was discontinued in 2014.)

“Protecting the integrity of the Medicaid program is crucial because millions of Americans, including hundreds of thousands of New Mexicans, depend on the program for medical care and related services,” said Acting U.S. Attorney James D. Tierney for the District of New Mexico. “This case illustrates our commitment to ensuring that government funds are legally obtained and used for their intended purposes. We will use all available civil remedies to recover the ill-gotten gains obtained by those who defraud government healthcare programs.”  The settlement stems from a lawsuit originally filed by a former New Mexico Indigent Health Care Administrator under the qui tam provisions of the False Claims Act. Under these provisions, private individuals are permitted to sue on behalf of the government and to share in any subsequent recovery. In this case, the whistleblower will receive $2.249 million as her share of the settlement.