Franklin, TN – Community Health Systems Inc., the nation’s largest operator of acute care hospitals, has agreed to pay a staggering $98.15 million to resolve multiple lawsuits alleging that the company knowingly billed government healthcare programs for inpatient services that should have been billed as outpatient or observation services.
The settlement also resolves allegations that one of the company’s affiliated hospitals, Laredo Medical Center (LMC), improperly billed the Medicare program for certain inpatient procedures and for services rendered to patients referred in violation of the Physician Self-Referral Law, commonly known as the Stark Law.
“Charging the government for higher cost inpatient services that patients do not need wastes the country’s healthcare resources,” said Assistant Attorney General Stuart F. Delery for the Civil Division. “In addition, providing physicians with financial incentives to refer patients compromises medical judgment and risks depriving patients of the most appropriate healthcare available.”
The United States alleged that from 2005 through 2010, CHS engaged in a deliberate corporate-driven scheme to increase inpatient admissions of Medicare, Medicaid and the Department of Defense’s (DOD) TRICARE program beneficiaries over the age of 65 who originally presented to the emergency departments at 119 CHS hospitals.
CHS agreed to pay $89.15 million to resolve these allegations. The settlement does not include hospitals that CHS acquired from Health Management Associates (HMA) in January 2014.
In addition, the government alleged that from 2005 through 2010, one of CHS’s affiliated hospitals, LMC in Laredo, Texas, presented false claims to the Medicare program for certain cardiac and hemodialysis procedures performed on a higher cost inpatient basis that should have been performed on a lower cost outpatient basis.
“This is the largest False Claims Act settlement in this district and it reaffirms this office’s commitment to investigate and pursue healthcare fraud that compromises the integrity of our healthcare system,” said U.S. Attorney David Rivera for the Middle District of Tennessee.
CHS agreed to pay $9 million to resolve the allegations involving LMC. The company is based in Franklin, Tennessee, and has 206 affiliated hospitals in 29 states.
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