Office of the Attorney General News Release Archive


Thursday, May 24, 2001

CORNYN, DRISCOLL CHILDREN'S HOSPITAL REACH ACCORD

Corpus Christi Institution to Repay Texas $5.3 million

AUSTIN - Texas Attorney General John Cornyn today finalized an agreement with the Driscoll Children's Hospital and Foundation in Corpus Christi for repayment of Medicaid funds. The agreement calls for the hospital and foundation to refund $14.5 million, which will be divided between Texas and the federal government.

From 1994-99, the hospital allegedly provided false information to the Texas Department of Health (TDH), which led the Medicaid program to overpay the Driscoll Hospital. The hospital allegedly filed erroneous cost reports to the TDH for various expenses not allowed for reimbursement, reported inflated figures on charity work relating to the Disproportionate Share Hospital Program, and participated in possible violations of state and federal anti-kickback statutes.

For some time, Driscoll has been negotiating with the Attorney General and the U.S. Department of Justice to appropriately reimburse the government, rectify all disputed internal billing procedures, and ensure that problems of this sort do not recur.

"I want to emphasize that Driscoll officials have fully cooperated with my office to ensure that these monies are returned to the public," said Attorney General Cornyn. "The hospital's current administrators and trustees are making every effort to assure that all funds wrongfully received have been identified and will be paid back."

Of the total amount that Driscoll Hospital has agreed to repay, approximately $5.3 million will go directly to the state for restitution, investigative costs and attorneys' fees.

The case was initially filed on behalf of the state by the former chief financial officer of the hospital. The Civil Medicaid Fraud Section of the Attorney General's Office prosecuted the Driscoll case under the Texas Medicaid Fraud Prevention Act. State lawmakers enacted the measure in 1995 and Attorney General Cornyn created the Civil Medicaid Fraud Section soon after taking office in 1999 to address all civil matters involving Medicaid fraud. The Attorney General's Office also administers the Medicaid Fraud Control Unit (MFCU), which targets criminal activity.

Since 1999 the MFCU has identified about $25 million in fraudulent Medicaid overpayments in Texas, with more than $9 million of that discovered in this fiscal year alone. Also since that time, this unit has helped to fully recover an additional $16.8 million in cash for the Texas Medicaid Program.

Cornyn's office works routinely with attorneys general in other states, as well as the U.S. Department of Justice to recover Medicaid funds on a national scale. Last January, the Civil Medicaid Fraud Section settled with pharmaceutical giant Bayer Corp. to recover more than $750,000 for several years of overpayments for products covered by Texas Medicaid.

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