False Claims Act suit filed against New Mexico hospital

July 28, 2009  |  Press Releases

A whistleblower suit has been filed against New Mexico’s Community Health Systems, Inc. and Mimbres Memorial Hospital and Nursing Home (MMH), one of the company’s health care centers. The lawsuit was filed under the False Claims Act and alleges that MMH and its affiliates in Chaves and San Miguel counties devised a scheme for the hospitals to offer “donations” to New Mexico counties, which funds were then used to obtain federal funding at triple the amount of the “donation.” The federal funding was in turn paid back to the hospitals by way of the state’s Sole Community Hospital Supplemental Payments and Sole Community Provider Fund programs. Under those Medicaid programs, the federal government matches county funds for indigent care at a three-to-one rate and the increased amounts are then paid by the state to hospitals designated as sole community providers. Between 2000 and 2008, MMH asked for and received huge sums of money under those two state programs.

The health providers’ allegedly improper practices were brought to light in a whistleblower lawsuit filed by Robert Baker, previously a revenue manager for CHS in its corporate office. The suit alleged that the scheme violated a provision of the Medicaid Act that prohibits donations by a hospital that are tied to the amount of Medicaid reimbursement the state pays back to the hospital. According to the Qui Tam provisions of the federal False Claims Act, Baker, the whistleblower, will be permitted to share in any recovery made by the government as a result of the lawsuit.

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