Community Health Systems Inc. has agreed to pay $98.15 million to settle seven whistleblower lawsuits, including one brought by the former medical director of the emergency department at Lake Norman Regional Medical Center in Mooresville, South Carolina.
The lawsuits alleged that Community Health Systems, the nation’s largest operator of acute care hospitals, knowingly billed government programs for inpatient services that should have been billed as outpatient or “observation” services, the Charlotte Observer reports. Community Health Systems operates 206 affiliated hospitals in 29 states. From 2005 to 2010, the Justice Department said, CHS engaged in “a deliberate, corporate-driven scheme” to increase inpatient admissions of Medicare, Medicaid and Department of Defense TRICARE program beneficiaries at its hospitals. These admissions were medically unnecessary and patients should have received the care elsewhere. CHS has entered a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services. Claims for inpatient services made to federal health care programs will be monitored for accuracy, according to the Observer. The agreement contains no finding of improper conduct by Community Health Systems or its affiliated hospitals, and the company has denied any wrongdoing.
Federal prosecutors said Dr. Thomas Mason, of Mid-Atlantic Emergency Medical Associates in Charlotte provided key help to the Justice Department. Mason and eight other whistleblowers nationwide filed suits under provisions of the False Claims Act, which permits private parties to sue on behalf of the government and receive part of the money the government recovers. The whistleblowers’ share of the CHS settlement has not yet been determined, the Observer says.
Dr. Mason and Dr. Steven Folstad originally filed suit in 2010 in U.S. District Court against Lake Norman Regional Medical Center, Davis Regional Medical Center and the then-owner of the hospitals, Health Management Associates of Naples, Florida. The doctors claimed their group’s contracts to provide emergency care at the hospitals were terminated in 2010 because they refused to accept “illegal cash inducements” and resisted pressure to meet “corporate benchmarks” to maximize profits, the Observer reports.