St. Vincent Regional Medical Center, Christus Health to pay $12.2 million over illegal donation allegations

Credit: St. Vincent's

Christus Health and its Santa Fe St. Vincent Regional Medical Center hospital will pay $12.2 million plus interest to settle allegations that the hospital manipulated federal funding for an indigent care program to boost their revenues, making illegal donations to county governments that were used to fund the state share of Medicaid payments to the hospital, the Department of Justice announced Tuesday.

The program in question, New Mexico's Sole Community Provider program was discontinued in 2014. It provided supplemental Medicaid funds to hospitals in mostly rural communities, and the federal government reimbursed New Mexico for roughly 75 percent of its healthcare expenditures under the program.

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Federal law states that New Mexico's 25 percent "matching" share of that program's payments were required to consist of state or county funds, not donations from private hospitals, the DOJ said.

"This restriction on the use of private hospital funds to satisfy state Medicaid obligations was enacted by Congress to curb possible abuses and ensure that states have sufficient incentive to curb rising Medicaid costs."

According to the Cornell Law School Legal Information Institute website, the definition of bona fide donation states that a bona fide donation is a provider-related donation made to state or local government that has no direct or indirect relationship to Medicaid payments made to the health care provider.

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Phillips&Cohen, the firm that originally handled the complaint, said Christus and St. Vincent "transformed 'non-bona fide donations' to Santa Fe County into discretionary supplemental Medicaid payments that both refunded St. Vincent in full for its so-called donations and paid St. Vincent 'additional amounts of unwarranted federal funding that total approximately three times the amount of the hospital's investment in such refunded 'donations.'"

The firm said this means that Christus and St. Vincent "knowingly claimed and received increases in discretionary Medicaid payments through those programs that they knew they were not properly eligible to receive."

Christus Health commented on the settlement, saying that before the lawsuit was filed and for the duration of its participation in the program, the hospital worked cooperatively with the CMS, as well as Santa Fe County and the State of New Mexico. 

"One of the issues in the lawsuit involved the impact of arrangements between the hospital and the County for the support of various community health initiatives. Those arrangements were lawful, transparent and a matter of public record, and were well known by all stakeholders, including the county, the state and CMS. Despite this transparency, the lawsuit alleged that because the hospital financially supported these community health initiatives, funds transferred by Santa Fe County to the State in support of the New Mexico Medicaid Sole Community provider program were improper. We have determined that continued expenditure of time and resources in defense of these allegations is not in the best interests of the Santa Fe community or the hospital."

Per the settlement, there was no admission of guilt, and the allegations of the lawsuit were denied by CHRISTUS Health and the hospital. The county and the state were not named in the lawsuit. 

The whistleblower, or qui tam, lawsuit was originally brought by a former Los Alamos County, New Mexico indigent healthcare administrator in 2011. The federal government subsequently joined the case.  According to the law firm, that employee has since passed away. The employee's estate will receive $2.249 million, as is allowed in whistleblower lawsuits.

Twitter: @BethJSanborn
Email the writer: beth.sandborn@himssmedia.com