(MCALLEN, Texas) - After a lengthy investigation, the United States and the State of Texas have settled a False Claims Act lawsuit against Dr. Raul Marquez, a McAllen area physician, and two hospitals with which he is affiliated and has ownership interest, United States Attorney Don DeGabrielle and Texas Attorney General Greg Abbott announced today.

“This settlement restores more than $3 million to the taxpayers of the United States and the State of Texas, and further ensures Dr. Marquez complies with the rules and regulations pertaining to the Medicare and Medicaid programs, which are vital to the health and well-being of the citizens of the Rio Grande Valley,” United States Attorney Don DeGabrielle said.

“Texans demand proper billing practices from health care professionals utilizing the Medicaid program in their services," said Attorney General Abbott. "We appreciate the work of the U.S. Attorney's Office in reaching a resolution in this case that benefits the State of Texas and its taxpayers."

Marquez is an orthopedic surgeon licensed to practice medicine within the State of Texas. He practices medicine at Orthopedic Surgery Center and Sports Medicine in Edinburg, Texas, and at two hospitals in which he had an ownership interest, Cornerstone Regional Hospital, a 14 bed surgical center, and the now closed Cornerstone Rehabilitation Hospital, which had been a 25 bed inpatient rehabilitation facility.

Under the terms of the executed Settlement Agreement, Marquez, on behalf of himself and the corporate defendants, has agreed and paid the United States and the State of Texas a total of $3,128,466 and entered into a Corporate Integrity Agreement with the United States ensuring future compliance with all of the applicable rules and regulations of both the Medicare and Medicaid Programs.

The investigation leading to the filing of this lawsuit began in late 2002, when an orthopedic surgeon working with Marquez approached federal authorities and alleged Marquez was defrauding Medicare and Medicaid by billing for services not rendered as represented. The United States initially joined in a lawsuit filed under seal by the surgeon and, in September 2006, filed its own complaint alleging violations of the False Claims Act. In its complaint, the United States alleged Marquez, individually and through the Defendant hospitals, made false claims and false statements to the United States in connection with claims for reimbursement he submitted for his treatment of Medicare and Medicaid patients in violation of the False Claims Act.

The United States alleged Marquez, Orthopedic Surgery Center and Sports Medicine billed the Medicare and Medicaid programs for services to patients that were not rendered, or were not rendered as represented. The United States also alleged Marquez and Cornerstone Regional Hospital improperly coded patient discharges, which resulted in the Medicare program overpaying Marquez and Cornerstone Regional Hospital for surgeries.

The False Claims Act empowers private citizens with knowledge of fraud against the United States to present those claims to the United States by bringing a lawsuit on behalf of the United States. If the case is settled and monies are recovered by the United States and the State of Texas, the private citizen is entitled to share in any recovery.

With the execution of the settlement, the court granted the government’s motion dismissing the pending civil suit Friday, Aug. 31, 2007. Copies of the dismissal order and settlement agreement are available on the U.S. Attorney’s Office, Southern District of Texas website (www.usdoj.gov/usao/txs).

The investigation was jointly conducted by the Federal Bureau of Investigation, the Office of Inspector General for the Department of Health and Human Services and the Texas Medicaid Fraud Control Unit. The case was managed and settled by Assistant United States Attorney Andrew A. Bobb and Assistant State Attorney General Lara Silva.