The federal government has intervened in eight separate whistleblower lawsuits filed under the False Claims Act against Health Management Associates, Inc. (HMA), a Naples, Fla.-based company that operates 71 hospitals in 15 states including Alabama, Georgia and Mississippi. The lawsuits allege that the company devised a scheme to unnecessarily admit emergency-room patients as inpatients and bill Medicare, Medicaid, and other taxpayer-funded health care programs for the treatment.
According to the Justice Department, the U.S. government also backs allegations included in one of the whistleblower lawsuits that Gary Newsome, HMA’s former CEO, orchestrated a companywide practice of pressuring emergency room doctors and hospital administrators to boost inpatient admission rates regardless of medical necessity.
Additionally, the whistleblower lawsuits also assert that HMA paid physicians for patient referrals, a violation of the federal Anti-Kickback Statute, which prohibits offering, paying, soliciting, or receiving payment or other rewards to induce referrals of patients or services covered by federal health care programs. HMA’s alleged kickback scheme also violates the Stark Statute, which prohibits hospitals from submitting claims for patient referrals acquired through a physician with whom the hospital has an improper financial arrangement.
Both the Anti-Kickback and Stark Statutes are designed to prevent a physician’s medical judgment from being jaded by financial rewards and other improper incentives, which can and often do result in false claims to government health care programs and corrupted patient treatment.
“The Department of Justice is committed to ensuring that health care providers who attempt to misuse federal health care programs for their own profit are held accountable,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart Delery. “Schemes such as this one can contribute significantly to the rising cost of delivering health care and create needless patient risk.”
Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, said hospitals that improperly admit patients “cost the government millions of dollars in unnecessary fees and subject patients to excessive treatment and needless risk, driving up the cost of health care.”
The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allows individuals to sue on behalf of the U.S. government when they have evidence of fraud and other wrongdoing that harms U.S. agencies and programs. In return, whistleblowers receive a percentage of the recovery. The U.S. can choose to intervene and effectively take over the lawsuits, as it has done in the cases against HMA.
The eight lawsuits are pending in Southern and Middle Districts of Florida, Middle District of Georgia, Northern District of Illinois, Western District of North Carolina, Eastern District of Pennsylvania, and the District of South Carolina .