Consumer Fraud

Whistleblower lawsuit accuses major hospital chains of Medicaid fraud

osha whistle Whistleblower lawsuit accuses major hospital chains of Medicaid fraudA whistleblower lawsuit filed under the False Claims Act (FCA) and unsealed Wednesday accuses two large hospital operators of paying kickbacks to clinics that directed expectant, undocumented Hispanic women to their hospitals so that they could submit Medicaid claims on them.

According to the lawsuit, Health Management Associates of Naples, Fla., and Tenet Healthcare Corp. of Dallas, Texas, the third-largest U.S. hospital chain, recruited pregnant women living in the U.S. illegally who would become eligible for Medicaid benefits upon giving birth. The for-profit hospital systems contracted with Georgia-based Hispanic Medical Management, Clinica de la Mama, and affiliated companies, which sent the women to hospitals within the companies’ system. The clinics received kickbacks in exchange, the lawsuit says.

According to the lawsuit, Clinica lures undocumented, expectant Hispanic women to its prenatal clinics with the slogan, “we care about your health, not your immigration status.”

“The clinics then directed these vulnerable patients to the HMA and Tenet hospitals, which pay for the referrals,” an Associated Press report explains.

Although illegal immigrants aren’t eligible to receive regular Medicaid assistance, Medicare will reimburse hospitals for emergency services performed on those women. Medicaid codifies childbirth as an emergency medical condition eligible for reimbursement.

The lawsuit was brought by Ralph Williams, a former chief financial officer of Health Management Associates. Mr. Williams is suing on behalf of the U.S. government, alleging the fraud scheme lasted for more than a decade. The state of Georgia also joined the suit in an effort to recover Medicaid funds.

Qui tam or “whistleblower” provisions of the False Claims Act allow individuals with evidence of fraud, abuse, waste, mismanagement, and other wrongdoing to sue on behalf of the government. Whistleblowers receive a percentage of any recovery in return.

“These hospitals paid Clinica kickbacks camouflaged as interpreter service payments to funnel emergency Medicaid patients their way and increase their bottom line,” Georgia Attorney General Sam Olens said in a statement. “As Attorney General, I take seriously my responsibility to protect the integrity of Georgia Medicaid and to ensure that those who defraud the program are held accountable.”

According to the lawsuit, Mr. Williams discovered a contract between an HMA hospital in Georgia and Clinica for Spanish interpretation services, but could find no evidence that such services were ever performed. Investigating further, Mr. Williams discovered that the hospitals were paying Clinica for referrals so that they could perform Medicaid-subsidized deliveries. Shortly after he brought his concerns about the fraud to company leaders, he was fired without reason, the lawsuit says.


The Associated Press