HOUSTON - Christus Spohn Health System Corporation has paid the United States more than $5 million to settle allegations regarding violations of the False Claims Act, United States Attorney Kenneth Magidson announced today. The allegations included inappropriately admitting patients to inpatient status for outpatient procedures.

“Today’s settlement once again demonstrates our commitment against fraud and abuse that threatens the financial health of our federal healthcare programs,” said Magidson.

The settlement resolves allegations that six Christus Spohn hospitals in and around Corpus Christi, Texas, submitted false claims to the Medicare program by using inpatient codes for procedures that should have been billed under an outpatient code. This practice enabled these hospitals to collect more money from the Medicare program than they were entitled to collect. Those six hospitals included Christus Spohn Hospitals in Corpus Christi – Shoreline, Corpus Christi – Memorial, Corpus Christi – South, Alice, Beeville and Kleberg.

The investigation leading to the settlement began in March 2008 after Christus - Shoreline’s former director of case management filed a lawsuit under seal under the qui tam provisions of the False Claims Act alleging the six hospitals were submitting false claims to the Medicare program by billing for services that should have been performed on an outpatient basis as if they were more expensive inpatient services. The allegations stated that these hospitals were routinely billing outpatient surgical procedures as if they required an inpatient level of care, which greatly increased the amounts paid to these hospitals by the Medicare program. These patients were often discharged from the hospital in less than 24 hours.

The federal False Claims Act empowers private citizens with knowledge of fraud against the United States to present those allegations to the United States by bringing a lawsuit on behalf of the United States under seal. If the government’s investigation substantiates those allegations, then the private citizen is entitled to share in any recovery. In this case, that person will receive 20% of the $5,100,481.74 recovery.

The investigation was conducted by the Department of Health and Human Services - Office of Inspector General. Assistant United States Attorney Andrew A. Bobb managed the investigation and conducted the settlement negotiations.