Oklahoma Hospital Agrees to Settle Qui Tam Case

The Medical Center of Southeastern Oklahoma (“MCSO”) and its parent company, Health Management Associates, Inc. (“HMA”) have agreed to settle claims by a whistleblower in a qui tam lawsuit that they billed Medicaid for procedures that were either not medically necessary or were not performed in violation of the False Claims Act. MCSO is an acute care hospital located in Durant, Oklahoma. An acute care hospital provides short-term treatment for a severe injury or episode of illness, an urgent medical condition, or during recovery from surgery.

Medicaid is a health care program for people with low income in the United States. It is jointly funded by the federal government and the states, and managed by the individual states. The State of Oklahoma’s Medicaid program is known as SoonerCare.

In 2012, a whistleblower filed a qui tam lawsuit alleging that MCSO and HMA billed SoonerCare for unnecessary surgical procedures performed by Daniel Castro, M.D., an otolaryngologist (also known as an ear, nose and throat physician), and hospital services related to the unnecessary surgeries. Specifically, the whistleblower, Sandra Simmons, alleged that Dr. Castro performed functional endoscopic sinus surgeries (“FESS”) that were not medically necessary on children who were Medicaid beneficiaries. The whistleblower alleged that MCSO, HMA and Dr. Castro submitted claims to the SoonerCare Medicaid program for the unnecessary surgical procedures and related hospital services, and for services that were not actually performed. According to the whistleblower, the false claims were submitted between 2005 and 2010. Dr. Castro has not had medical privileges at MCSO since 2010.

MCSO and HMA will pay $1,065,000 to the federal government and $435,000 to the State of Oklahoma to settle the allegations. The whistleblower will receive approximately $160,000 of the settlement proceeds as her reward under the qui tam provisions of the False Claims Act.

The False Claims Act permits whistleblowers, known as relators, to file suit on behalf of the government against individuals or entities who commit fraud against a government agency. Typically, whistleblowers are entitled to a percentage of any recovery as a reward.

If you know of fraud on the government, click here to see if you may have a False Claims Act case.