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Catch of the Week — Health Management Associates

Posted  September 27, 2018

Health Management Associates, LLC (“HMA”), a former hospital chain now part of Community Health Systems, agreed on September 25th to a $260 million settlement to resolve allegations of false billing and kickbacks alleged in eight qui tam cases under the False Claims Act (“FCA”).

HMA was a hospital chain headquartered in Tampa, Florida that was acquired by Community Health Systems Inc., a major U.S. hospital chain, in 2014. One whistleblower will receive approximately $15 million as a share from this settlement and another whistleblower will receive approximately $12.4 million as a share. The shares of the remaining six whistleblowers from this settlement have not been determined.

FCA Violations

The FCA allegations centered on HMA billing the government for inpatient services that should have been billed as outpatient or observational services, the payment of remuneration to physicians in exchange for referrals, and the submission of inflated claims for emergency department facility fees. HMA allegedly set aggressive company-wide admission rate benchmark and threatened emergency room physicians with termination to increase emergency inpatient admissions in an effort to increase HMA revenue.

HMA also settled claims that two HMA hospitals billed federal health care programs for services provided by physicians who received remuneration from HMA in exchange for its referrals. The settlement also covers various other issues including favorable rent terms for HMA facilities and excessive payments to physician groups.


Various U.S. attorneys commented on this settlement. U.S. Attorney Maria Chapa Lopez said “The payment of kickbacks in exchange for medical referrals undermines the integrity of our healthcare system. Today’s resolution should remind healthcare providers of their duty to comply with the law, and the heavy price to be paid for corrupt practices committed by their executives. Our Civil Division will continue to invest itself in the pursuit of health care providers who violate the law for personal gain.” U.S. Attorney Charles Peeler said “By manipulating patient status, HMA increased Medicare costs and pocketed taxpayer funds to which it was not entitled. 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.”

Whistleblower rewards are available to qualified individuals who file claims under the qui tam provisions of the False Claims Act and like the whistleblowers in this settlement, whistleblowers can be rewarded under the statute. The importance of whistleblowers in addressing fraud against the government is demonstrated by large settlements resulting from qui tam cases. The benefits of whistleblowers to the federal government and the taxpayers will endure and grow with whistleblower serving as a key check on entities that attempt to commit fraud for their own gain.

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Tagged in: Anti-Kickback and Stark, Catch of the Week, FCA Federal, Healthcare Fraud, Hospital Fraud, Upcoding, Whistleblower Case, Whistleblower Rewards,