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Feds Target HMA's Ex-CEO

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The U.S. Department of Justice has signed on to eight false claims lawsuits against Health Management Associates, claiming the Naples-based hospital chain billed for unnecessary patient admissions and paid kickbacks to doctors who referred patients.

The government specifically alleges that former HMA executive Gary Newsome personally led the push to pressure emergency department physicians and hospital administrators to increase the number of inpatient admissions, “regardless of medical necessity,” the Department said in a statement.

Newsome retired from HMA last year and is now president of a South American mission program for the Church of Jesus Christ of Latter-Day Saints.

While some of the complaints about kickbacks and unnecessary admissions had been public since December 2012, when they were aired by CBS' 60 Minutes, some of the lawsuits remained sealed until last week.

HMA has denied wrongdoing all along. On Tuesday, spokeswoman MaryAnn Hodges said in an e-mail that the current management is cooperating with the investigation. She said she could not comment on pending litigation. 

"HMA associates and physicians who practice at our facilities are focused on providing the highest quality patient care in all of our hospitals," she wrote.

The chain owns or leases 23 hospitals in Florida, including some that it bought or leased after the accusations began.They include Bayfront Medical Center in St. Petersburg and Munroe Regional Medical Center in Ocala. Those who may be touched by the wide-ranging investigation include UF Health, which is in a joint venture with HMA in three hospitals.

Now, writes Tampa Bay Times business columnist Robert Trigaux, "What did Bayfront Health step in?" He says the once-independent St. Petersburg hospital is now caught up in a mess with a "nose-pinching aroma."

The whistle-blower lawsuits allege that HMA broke anti-kickback laws that apply to those who bill Medicare and Medicaid. The Department said Monday that bonuses or contracts were given to physician groups staffing HMA emergency rooms, by providing free office space, staffing or offering direct payments. The Department singles out Primary Care Associates, a practice in Port Charlotte, for its referrals to two Florida HMA hospitals.

“Unlawful financial relationships between hospitals and physicians solely to increase referrals are, unfortunately, a common practice that corrupts the health care system,” U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer said in a statement.

“The system also suffers a direct financial hit when hospitals fraudulently increase admissions where they are not indicated, solely to benefit hospitals’ bottom line.  We will not relent in our efforts to combat these kinds of fraudulent schemes and recover funds for the Medicare program.”

The announcement is just the latest in troubles for the community-hospital network, which operates 71 hospitals in 15 states. Just last week, HMA stockholders approved its nearly $4 billion sale to a Tennessee-based chain, Community Health Systems.

Janet Goldstein, an attorney for two Florida whistleblowers, told Bloomberg News that the government’s involvement “speaks to the quality of the evidence.”

--Health News Florida is part of WUSF Public Media. Contact Reporter Mary Shedden can at (813) 974-8636, on Twitter @MaryShedden, or email at shedden@wusf.orgContact Editor Carol Gentry at 813-974-8629 (desk) or e-mail at cgentry@wusf.org. For more health news, visit HealthNewsFlorida.org.