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Government intervenes in 8 HMA admissions kickback lawsuits

By Nicole Freeman

The Department of Justice is intervening in eight False Claims Acts lawsuits against Health Management Associates Inc. (HMA) claiming that HMA’s former CEO Gary Newsome led the corporation in pressuring emergency department staff to unnecessarily raise impatient admission rates, and HMA billed federal healthcare programs for medically unnecessary emergency department impatient admissions at HMA hospitals, totaling 71 across 15 states.

Other charges against HMA allege that other corporate officials pressured emergency room doctors to admit patients that could have been discharged, treated as outpatients, or put under observation, causing inflated or false healthcare claims. In one case, patients who could have undergone outpatient surgical processes were admitted. Physicians who participated in HMA’s scheme were given kickbacks either as contracts or bonuses. Two Port Charlotte, Florida doctors who induced referrals were given directed payments, as well as free office space and staffing.

Paying or offering to pay healthcare workers for induced services or referrals covered by federally funded programs like Medicare and Medicaid is prohibited by the Anti-Kickback Statute, and the Stark Statute forbids hospitals from submitting patient claims related to such arrangements. These statutes were put in place to prevent physicians from focusing on financial gain over the best interest of any patient.

“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 F. Delery in a public statement. “Schemes such as this one can contribute significantly to the rising cost of delivering health care and create needless patient risk.”

The lawsuits were filed under the False Claims Act’s whistleblower provision, allowing a private party to sue on the government’s behalf if they feel the accused has filed false claims with the intention of receiving any share of the funds. In these lawsuits, the government may choose to pursue the cases, as is being done against HMA. The pending lawsuits were filed 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 District of South Carolina.

The Department of Justice has recovered more than $17 billion as a result of False Claims Act cases, over $12.2 billion of which stemmed from healthcare fraud.

The Centers for Medicare and Medicaid Services (CMS) has been working to reduce unnecessary hospital admissions, most recently with the creation of Hospital Readmissions Reduction Program, which requires CMS to reduce payments to Inpatient Prospective Payment System (IPPS) hospitals with excess readmissions. The regulation went into effect on October 1, 2012.

For the full release from the Department of Justice, click here.

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