Hospital chain agrees to pay $260 million to settle whistleblowers’ fraudulent billing allegations

by Jay Pate

A hospital chain that operates a number of facilities across the southern United States has agreed to pay a $260 million settlement over claims that it pressured doctors to admit patients to the emergency room so that it could bill to government more for these services. The allegations against Health Management Associates came to light as a result of eight qui tam lawsuits that were filed by whistleblowers against the hospital chain on behalf of the federal government.

Health Management Associates operated hospitals in Florida, North Carolina, Kentucky, South Carolina, and Arkansas. In 2014, the hospital chain was acquired by another company, Community Health Systems Inc.

According to the Justice Department’s allegations against Health Management Associates, the hospital chain “pressured emergency room physicians, including through threats of termination, to increase the number of inpatient admissions from emergency departments — even when those admissions were medically unnecessary.” As a result of this pressure, Health Management Associates was able to bill federal and state governments for millions of dollars in unnecessary medical treatments. The Justice Department also alleged that Health Management Associates paid illegal kickbacks in exchange for patients who were referred to their facilities.

Following an eight year investigation, Health Management Associates agreed to pay $260 million to settle the Justice Department’s allegations of fraud. The $260 million settlement includes $216 million in payments to resolve civil allegations of fraudulent billing and illegal kickbacks against the hospital chain. An additional $7.2 million in payments will also be made to certain state governments in order resolve state-level fraud allegations. Health Management Associates also agreed to pay a $35 million penalty to the federal government.

The allegations of fraud against Health Management Associates stemmed from a group of eight qui tam whistleblower lawsuits that were filed on behalf of the government. In qui tam claims, individuals who are witnesses to fraud against state or federal agencies can file a lawsuit against the perpetrators of the fraud on behalf of the government and receive a portion of the amount that is recovered.

According to Justice Department officials, two of the individuals who filed qui tam lawsuits against Health Management Associates will receive about $12.4 million and $15 million from the government’s settlement with the hospital chain. The recovery amounts for the other whistleblowers has yet to be decided.

Whistleblowers May Qualify to File a Qui Tam Lawsuit Under the False Claims Act

If you have witness fraud involving federal agencies – including Medicare, Medicaid, the IRS, the Department of Defense, or other entities – or fraud against state governments, you may be eligible to file a qui tam whistleblower lawsuit and receive a portion of the amount recovered by the government. The first step in filing a qui tam claim is to talk with an attorney who has the experience in whistleblower lawsuits to guide you through the process of taking legal action.

The law firm of Heygood, Orr & Pearson has filed whistleblower claims on behalf of individuals who witnessed fraud against federal agencies. Our lawyers successfully negotiated a $1.75 million award for an individual who uncovered fraud in a large tax case. The attorneys at Heygood, Orr & Pearson have the knowledge and experience to ensure that whistleblowers receive the highest possible compensation for pursuing allegations of fraud against the government.

For more information about filing a qui tam lawsuit and to find out whether you may be eligible to take legal action, contact the lawyers at Heygood, Orr & Pearson for a free consultation. You can reach us by calling our toll-free hotline at 1-877-446-9001, or by following the link to our free whistleblowers consultation form and answering a few simple questions to get started.

by Jay Pate

John “Jay” Pate is a licensed attorney who focuses his practice on complex tort litigation involving catastrophic personal injury, wrongful death, medical malpractice, and product liability cases.