A former U.S. hospital chain will pay at least $260 million to settle false-billing and other claims, the U.S. Justice Department said Tuesday.
The settlement involved claims made against the chain in eight lawsuits filed in the Carolinas, Florida, Georgia, Illinois, Mississippi and Pennsylvania, including by two Charlotte area doctors..
Health Management Associates LLC of Naples, Fla., defrauded taxpayers with a “scheme” that in part had its hospitals bill Medicare and Medicaid for inpatient services that should have been billed as far less expensive outpatient care, according to a Department of Justice news release.
The chain also would “threaten” emergency room doctors to admit patients who didn’t need to be hospitalized -- or else be fired, according to the government news release.
“Hospital operators that improperly influence a physician’s medical decision-making in pursuit of profits do so at their own peril,” U.S. Assistant Attorney General Brian Benczkowski said in the news release. “Where we find such conduct, the Criminal Division’s Health Care Fraud Unit, together with our Civil Division and law enforcement colleagues, will aggressively prosecute those responsible to the fullest extent of the law.”
The original lawsuits included ones filed in 2010 by Drs. Thomas Mason and Steve Folstad, members of the Charlotte-based Mid-Atlantic Emergency Medical Association.
Mason and Folstad worked in the emergency departments of Lake Norman Regional Medical Center in Mooresville and Davis Regional Medical Center in Statesville, the Observer reported in December.
Mason was the former emergency room director at Lake Norman Regional Medical Center in Mooresville. Folstad was the longtime medical director of Iredell County’s EMS and former head of the emergency department at Davis Regional Medical Center in Statesville, according to their lawsuit.
“The settlement today is a result of eight years of hard work by the Department of Justice, the U.S. Attorney’s office in Charlotte, our legal team and our clients,” James Wyatt, the doctors’ Charlotte attorney, told The Charlotte Observer in an interview Tuesday night.
Folstad and Mason have claims remaining for “retaliatory discharge and related claims,” Wyatt said.
HMA was bought in 2014 by another major hospital chain, Community Health Systems Inc., according to the government news release.
In its own news release Tuesday, Community Health Systems said: “In reaching the settlement, the government noted that all conduct reviewed in its investigation pre-dated the HMA acquisition, and that following the acquisition, Community Health Systems engaged in remedial measures, including removing the HMA Board of Directors and senior executives and integrating the HMA affiliated hospitals into Community Health System’s existing compliance program.“
The settlement money is expected to be paid in October, the company said in its news release.
Since it bought HMA, Community Health Systems has aimed to resolve the government’s investigation, said Wayne Smith, the company’s chairman and chief executive officer.
“We are pleased to have reached the settlement agreements so we can move forward now without the burden or distraction of ongoing litigation,” Smith said in the company’s news release.
The U.S. government outlined the settlement with HMA as follows, according to the Department of Justice news release:
“ - $62.5 million for submitting false claims between 2008 and 2012 to Medicare, Medicaid and the Department of Defense’s TRICARE program.