Government claims hospital owner charged Medicare for BMWs

The federal government has intervened in a False Claims Act lawsuit filed against Wiggins, Miss.-based Stone County Hospital and its owner, according to the Department of Justice.

In its complaint, the government alleges Ted Cain, who owned the critical access hospital and its management company, and his wife abused the special Medicare rules for rural hospitals. The government specifically claims the husband and wife were paid for serving in various management and directorship positions but did little of the work the hospital paid them for.

A former Stone County Hospital administrator, James Aldridge, originally brought the lawsuit under the qui tam, or whistle-blower, provision of the False Claims Act. In his lawsuit, Mr. Aldridge claims the Cains did nothing to justify their "exorbitant salaries."

The lawsuit claims the hospital's management company, Corporate Management, paid Mr. Cain $21.3 million from 2004 through 2013, with Medicare reimbursing $10.4 million as part of the cost of running the hospital, according to a Tri-City Herald report.

Corporate Management paid Julie Cain $2.3 million from 2003 through 2013, with Medicare reimbursing $1.7 million, according to the lawsuit.

The government also alleges Mr. Cain improperly received $47,635 from Medicare from 2002 to 2009 to cover the cost of two BMW automobiles that were for his personal use, according to the report.

Regarding the government's intervention in the lawsuit, Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the DOJ's Civil Division, said, "The Medicare reimbursement rules for critical access hospitals are intended to ensure that Medicare beneficiaries living in rural areas receive access to the healthcare services they need. We will aggressively pursue providers who try to take advantage of these rules to line their own pockets."

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