Feds, Hospital Chain Reach Deal On Fraud Allegations

Sep 27, 2018

The former Naples-based hospital chain Health Management Associates will pay more than $260 million to resolve criminal and civil allegations of health-care fraud. 

The U.S. Department of Justice late Tuesday announced the penalties for HMA, which was acquired in 2014 by the Tennessee-based Community Health Systems.

In part, federal prosecutors accused HMA of billing government health programs for more-expensive inpatient services when it should have billed for outpatient or observation services, according to a Justice Department news release.

Also, prosecutors alleged that HMA improperly paid doctors for patient referrals and submitted inflated claims for emergency-department fees.

To resolve the criminal allegations, HMA agreed to pay a $35 million penalty.

Part of a related civil settlement involved allegations that two HMA hospitals in Florida, Charlotte Regional Medical Center and Peace River Medical Center, billed federal health-care programs for services referred by physicians who received improper compensation.

Charlotte Regional allegedly provided a local physicians group with free office space and staff, as well as direct payments, to spur referrals, the Department of Justice news release said.

HMA also was accused of providing another local physician with free rent and upgrades to his office space to get referrals.

HMA agreed to pay $93.5 million to resolve those allegations, with the federal government receiving $87.96 million, and the state receiving $5.54 million.

The settlement resolves lawsuits filed by several whistleblowers under the False Claims Act, which allows people to file suits on behalf of the government and obtain part of the recovery.