Lakeway Regional Medical Center to pay more than $14.6M in settlements for two separate civil cases

Travis County
Lakeway Regional Medical Center

Lakeway Regional Medical Center

LAKEWAY, Texas (KXAN) — Lakeway Regional Medical Center has agreed to pay more than $14.6 million in two separate civil cases — both to settle False Claims Act allegations.

False Medicare, Medicaid claims

Lakeway Regional agreed to pay more than $1.1 million in settlements for a civil suit alleging false claims submitted to Medicare and Medicaid.

U.S. Attorney John F. Bash of the Western District of Texas announced Monday that Lakeway Regional Medical Center will pay $1,119,177.21 to the United States and the State of Texas.

This will resolve allegations that the medical center caused some physicians to refer patients to the hospital “by offering them a low-risk, high-reward investment in a joint venture formed to purchase and then lease the hospital back to LRMC.”

The Department of Justice says claims for reimbursement submitted to the Medicare and Medicaid programs between March 2, 2015 and August 31, 2016 based on the referrals made were unlawful under the Anti-Kickback Statute, the press release said.

The allegations were brought forth by two people, Dr. Robert Van Boven and Sharon Van Boven, in a whistleblower lawsuit filed under the False Claims Act, which allows “private parties to sue on behalf of the government for false claims, and to receive a share of any recovery.”

Making false statements to obtain FHA loans

The Department of Justice also announced Lakeway Regional agreed to pay $13,580,822.79 to resolve allegations of making false statements to the Federal Housing Administration to get a loan for the medical center’s development.

The FHA insures loans used to build hospitals in underserved areas, a DOJ press release explained. The civil suit alleged that when applying for a mortgage loan from the FHA to fund construction, the medical center made “numerous false statements and material omissions” in order to play up support for the hospital.

The medical center also allegedly underplayed other important credit risks, which would lead them to get the loan under false pretenses, the DOJ said.

“The United States alleged that the defendants delayed refunds to investors who had cancelled their investments to make it appear as if the project satisfied mortgage covenants regarding the cash on hand required to close the loan,” a DOJ press release said.

The settlement also resolves claims that say after Lakeway Regional got the loan, defendants distributed funds in violation of FHA’s requirements.

Surgical Development Partners LLC, Surgical Development Partners of Austin Enterprises LLC, G. Edward Alexander, Frank Sossi, and John Prater also collectively agreed to pay $1.8 million in the case.

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