- Associated Press - Monday, September 21, 2015

JACKSON, Miss. (AP) - The U.S. Attorney’s Office has filed a lawsuit that accuses Stone County Hospital and its management company of committing millions of dollars in Medicare fraud for more than a decade.

The Sun Herald reports (https://bit.ly/1j0tX0E) the lawsuit was initially filed under seal in 2007 as a whistleblower complaint by former hospital COO James Aldridge. After investigating the case, the U.S. Attorney’s Office decided to intervene and filed its own lawsuit Friday in U.S. District Court.

The complaint accuses CEO H. Ted Cain and his wife, Julie Cain, of Ocean Springs, of taking advantage of Medicare rules that apply to small, rural hospitals.

It says millions in fraudulent Medicare reimbursements were related to Ted Cain’s “exorbitant, multimillion-dollar salary,” Julie Cain’s quarter-million-dollar salary as administrator and expenses for two BMWs that Ted Cain used as personal cars. The expenses, the lawsuit says, had nothing to do with the hospital or its Medicare beneficiaries.

The lawsuit says Ted Cain owns and controls the hospital and management company. Julie Cain, it says, served as hospital administrator from 2003 through 2012. It also alleges “they contributed little of value to this endeavor and nothing to justify their exorbitant salaries.”

The management company paid Ted Cain $21.4 million between 2004 and 2013, with $10.4 million reimbursed by Medicare. The lawsuit says he had little or no work at the hospital to show for the salary. Medicare reimbursed a total of $47,635 in expenses on his luxury vehicles, the lawsuit says, an unallowable expense.

Julie Cain received total compensation of more than $2.5 million from 2003 to 2013, the lawsuit says, with almost $1.7 million reimbursed by Medicare. “Notwithstanding this exorbitant compensation,” the lawsuit says, “. Julie Cain did not function as an administrator at, or provide valuable management services to, the hospital.”

The lawsuit says staff members ran the hospital, and the management company also was paid millions for its services, which included submitting the Medicare reports.

The government is asking for triple the actual Medicare losses from the defendants on three civil charges: presenting false claims, using false records to back the claims and failing to refund government payments. On a fourth charge of unjust enrichment, the government wants the defendants to pay the money they are alleged to have wrongfully received.

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Information from: The Sun Herald, https://www.sunherald.com

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