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Community Health Systems Resolves FCA Allegations

August 6, 2014

Community Health Systems, Inc. (CHS), the nation’s largest operator of acute care hospitals based in Franklin, Tennessee, has agreed to pay $98.15 million to resolve allegations that the company knowingly billed government health care programs for inpatient services that should have been billed as outpatient services and that one of the company’s affiliated hospitals, Laredo Medical Center, improperly billed Medicare for certain inpatient procedures and for services in violation of the Stark Law according to a DoJ press release.  Specifically, the United States alleged that CHS deliberately schemed to increase inpatient admissions of Medicare, Medicaid and TRICARE beneficiaries over the age of 65 who presented to the emergency departments at 119 CHS hospitals.  The allegations further provide that these inpatient admissions were not medically necessary.  The care provided to these beneficiaries should have been provided in a less costly outpatient setting.  The United States further alleges that Laredo Medical Center violated the Stark Law, by billing Medicare for services referred by a physician who was offered a medical directorship at the hospital.

“Charging the government for higher cost inpatient services that patients do not need wastes the country’s health care resources,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division.  “In addition, providing physicians with financial incentives to refer patients compromises medical judgment and risks depriving patients of the most appropriate health care available.”

This settlement resolves multiple lawsuits brought under the qui tam provisions of the False Claims Act.  The relators are Kathleen Bryant, Rachel Bryant, Bryan Carnithan, Amy Cook-Reska, Sheree Cook, James Doghramji, Thomas Mason, Scott Plantz, and Nancy Reuille.  All relators are former CHS employees from all across the United States.

To report health care fraud, please contact Frohsin & Barger.

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