Emily Moore Oct. 5, 2015, 9:01am


WASHINGTON (Legal Newsline) - The federal government has intervened in a lawsuit filed against a Mississippi hospital, management company and two individuals for allegedly abusing Medicare regulations set for rural critical care institutions, the U.S. Department of Justice announced.

Stone County Hospital, a critical access hospital located in the rural community of Wiggins, Miss., and Corporate Management Inc. were named in the lawsuit. H. Ted Cain, who owns and controls both the hospital and management company and hospital, and Julie Cain also were named in the lawsuit.

The lawsuit alleges that the Cains’ made claims of completing and being paid for work for the hospital that was duplicated by other hospital and management company staff.

Claims also were allegedly made by the management company for luxury automobiles, which are not reasonable and necessary charges under the Medicare regulations for rural critical access hospitals.

“The Medicare reimbursement rules for critical access hospitals are intended to ensure that Medicare beneficiaries living in rural areas receive access to the health care services they need,” Principal Deputy Assistant Attorney General Benjamin C. Mizer said in a statement.

“We will aggressively pursue providers who try to take advantage of these rules to line their own pockets.”

The lawsuit was filed under the whistleblower provisions of the False Claims Act.

The claims were investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Southern District of Mississippi, and the Department of Health and Human Services’ Office of Inspector General.

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