Hospital Agrees to Pay $260 Million to Resolve False Billing and Kickback Allegations
The government, it seems, is constantly untangling schemes it alleges defrauds its programs and breaches the public’s trust in its healthcare providers. This is what it claims happened earlier this week when the Department of Justice announced that Florida-based Health Management Associates, LLC (HMA), has agreed to pay more than $260 million to resolve criminal charges and civil claims that it engaged in a scheme to defraud the government. The government says it did so when it paid remunerations to physicians for patient referrals, submitted inflated claims for emergency department fees and knowing billed patients for inpatient services when outpatient or observation services were provided. These practices, the government says, violated the federal Anti-Kickback Statute (42 U.S. Code § 1320a–7b) as well as the False Claims Act. Several state and federal agencies including the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the joint announcement.
Currently, HMA has been operating under a Corporate Integrity Agreement (CIA) between Community Health Systems Inc. – its former owner – and the HHS-OIG. The conduct HMA is accused of having engaged in occurred after January 2014. As part of the criminal resolution, HMA has also entered into a three-year Non-Prosecution Agreement (NPA) with the Criminal Division’s Fraud Section. Under the terms of the NPA, HMS and CHS must cooperate with the investigation, report allegations and/or evidence of violations of Federal law and comply with the CIA it entered into. In addition to the settlement agreement HMA accepted, Carlisle HMA, LLC – a subsidiary – has agreed to plead guilty to one count of conspiracy to commit health care fraud. (Formerly, Carlisle HMA, LLC owned and operated Carlisle Regional Medical Center.)
“By manipulating patient status, HMA increased Medicare costs and pocketed taxpayer funds to which it was not entitled,” said U.S. Attorney Peeler. “Our Medicare patients and our taxpayers deserve better, and I am proud that justice has been done. Nonetheless, we will continue to pursue those hospitals in our district that would seek to take advantage of the Medicare Program.”
“Our office will continue to enforce prohibitions on improper financial relationships between health care providers and their referral sources, as these relationships can serve to corrupt physician judgment about a patient’s true health needs,” said U.S. Attorney Fajardo Orshan. “We will devote all necessary resources to ensure that those rendering medical care do so for the sole benefit of the patient and in compliance with the law.”
As a part of the settlement, HMA has agreed to pay $216 million to resolve charges that it submitted false claims between 2008 and 201 as part of a corporate-wide scheme to increase patient admissions of Medicare, Medicaid and TRICARE beneficiaries. The government alleged that HMA did so without medical necessity and that services could have been done in a more cost efficient manner. The breakdown goes as such: HMA will pay $61,839,718 to the US government and $706,084 to participating states. The civil settlement in this case resolves allegations that during the period from 2003 through 2011, two of HMA’s hospitals referred patients to doctors with whom they had a monetary relationship with in violation of the Anti-Kickback Statute. For this, HMA has agreed to pay the United States $87.96 million and the State of Florida $5.54 million. The Anti-Kickback Statute and the Stark Law, prohibits hospitals from providing financial inducements to physicians for referrals.
“Billing for unnecessary hospital stays wastes federal dollars,” said Assistant Attorney General Hunt. “In addition, offering financial incentives to physicians in return for patient referrals undermines the integrity of our health care system. Patients deserve the unfettered, independent judgment of their health care professionals.”
The allegations resolved by the settlement were brought about in eight lawsuits filed under the qui tam or whistleblower, provisions of the False Claims Act. This act permits private parties to sue on behalf of the government for false claims and to receive a portion of any recovery. Plaintiffs who do so usually engage the services of a qui tam Medicare lawyer. A qui tam attorney is knowledgeable in all areas of the False Claims Act.