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Cornerstone Healthcare Group settles fraud allegations with $21 million settlement

by John R. Fischer, Senior Reporter | February 28, 2023
Business Affairs
Cornerstone Healthcare Group has paid over $21 million to settle Medicare fraud allegations.
Cornerstone Healthcare Group Holding and CHG Hospital Medical Center will pay the U.S. $21,637,512 to settle accusations that it billed Medicare for unauthorized services, services not provided, and services that were so inadequate they were considered worthless.

Formerly a long-term acute care facility in Houston, Cornerstone Medical Center acted as a long-term care hospital, providing medical and rehabilitative care to individuals with clinically complex and multiple acute and chronic conditions. It was a subsidiary of CHG Holding, which operated it as a specialty hospital. Cornerstone Medical Center closed in 2020, according to the Houston Chronicle.

The suit was filed under seal in September 2018 by a whistleblower who, while working at Cornerstone Medical Center long-term care facility, witnessed unlicensed and unauthorized students of Drs. Jorge Guerrero, Joel Joselevitz and Joseph Varon render medical procedures that were then fraudulently billed to Medicare.

The provider also submitted claims for services that certain treating physicians allegedly rendered, only for records to show that these doctors were out of the country at the time when these procedures allegedly took place.

Additionally, from January 2012 to December 2018, Cornerstone Medical Center billed for services not warranted by patients’ diagnoses or medical records. It also billed for care not rendered or deemed inadequate and worthless, with some services resulting in patients being harmed.

“These patients trusted their doctors and healthcare providers and ultimately received little to no care. At the end of the day, healthcare fraud affects everyone. It raises our health insurance premiums and exposes patients to worthless and unnecessary medical procedures,” said FBI Special Agent in Charge James Smith in a statement.

The False Claims Act allows private parties to file an action on behalf of the U.S. government in exchange for a portion of the recovery. The whistleblower in this case will receive $4,327,502.

The FBI worked with the U.S. Attorney’s Office, the Office of Inspector General for the United States Department of Health and Human Services, and the Department of Defense.

There has been no determination of liability.

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