U. S. SETTLES LAWSUIT AGAINST HARRIS COUNTY HOSPITAL DISTRICT

(HOUSTON, TX.) After a lengthy investigation, the United States and the State of Texas have settled a lawsuit against the Harris County Hospital District (Hospital District) for more than $15 million, United States Attorney Don DeGabrielle announced today. Under the terms of the settlement, the Hospital District has agreed to pay to the United States and the State of Texas $15,449,126, one of the largest settlements for cases brought under the False Claims Act in the Southern District of Texas, and to comply with Medicare and Medicaid regulations in the future.

“The settlement reached in this case restores more than $15 million to the taxpayers of the United States and Texas, but more importantly, results in the Hospital District agreeing to properly invoice Medicare and Medicaid in the future,” said United States Attorney Don DeGabrielle.

“Today’s settlement demonstrates the Justice Department’s continued commitment to ferret out fraud and abuse that threaten the integrity of federal health care programs,” said Peter D. Keisler, Assistant Attorney General for the Department’s Civil Division.

The investigation leading to this settlement began in October of 2003, after an employee in Patient Billing Services for the Hospital District, Robert E. McCaslin, Jr., filed a lawsuit under seal under the qui tam provisions of the False Claims Act alleging that the Hospital District was making false claims and false statements to both the United States and the State of Texas in connection with reimbursement claims being submitted to the Medicare and Medicaid programs for the treatment of patients between 2000 and 2005.

In his lawsuit, McCaslin alleged that the Hospital District routinely submitted claims to the Medicare and Medicaid programs without first seeking reimbursement from primary carriers as required by each program’s rules and regulations. The end result of this practice was that Medicare and Medicaid paid claims that should have been paid by other responsible third party insurers. McCaslin also alleged that the Hospital District improperly submitted claims to Medicare and Medicaid for services provided to incarcerated individuals. Generally, medical services provided to an incarcerated individuals must be billed to the individual, and only in limited circumstances will Medicare and Medicaid pay for such services. McCaslin alleged that the Hospital District regularly violated regulations billing Medicare and Medicaid for these services without first seeking to collect from the individual.

Under the terms of the settlement, the federal government will recover $12,095,839, and the State of Texas will recover $3,353,287. In addition to paying these settlement amounts, the Hospital District has also entered into a compliance agreement with the Department of Health and Human Services Office of Counsel to the Inspector General meant to ensure that in the future the Hospital District fully complies with all of the rules and regulations governing the Medicare and Medicaid programs.

The federal and state False Claims Acts empower private citizens with knowledge of fraud against the United States to present those claims to the United States by bringing a lawsuit on behalf of the United States. If the allegations are substantiated, then the private citizen is entitled to share in any recovery.

The investigation was conducted by the Office of Inspector General for the Department of Health and Human Services. Assistant United States Attorney Andrew A. Bobb and Texas Assistant Attorney General Lara Silva oversaw the investigation and conducted the settlement negotiations.

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