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Whistleblowers get at least $27.4 mln in False Claims Act cases

The federal government intervened in eight False Claims Act lawsuits and brought criminal charges against Health Management Associates, LLC (HMA), a hospital chain that has since been sold. According to the Justice Department, HMA engaged in a scheme to defraud the U.S. The allegations include:

  • Unlawfully pressuring doctors to increase emergency department patient admissions even when not medically necessary
  • Billing federal healthcare programs for higher-paying inpatient care when outpatient or observation care were actually performed
  • Formally instituting an aggressive plan to unlawfully increase emergency department inpatient admissions at all its hospitals, including subsidiaries, solely to increase revenue
  • Coercing doctors and medical directors, by threat of termination, to meet strict inpatient emergency department admission benchmarks without regard to whether the patients actually needed inpatient care
  • Billing federal healthcare programs for referred services when the referring physicians were paid for those referrals with items such as free office rent
  • Billing federal healthcare programs for services referred by doctors with whom the company and its facilities had improper financial relationships. According to the Justice Department, these relationships were structured to disguise payments meant to induce referrals

The federal Anti-Kickback Statute and Stark Law prohibit hospitals from providing financial inducements to doctors for referrals. This is meant to ensure that doctors base their referral decisions on patient needs, not financial incentives.

"HMA 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," a spokesperson for the Justice Department. "Hospital operators that improperly influence a physician's medical decision-making in pursuit of profits do so at their own peril. Where we find such conduct, the Criminal Division's Health Care Fraud Unit, together with our Civil Division and law enforcement colleagues, will aggressively prosecute those responsible to the fullest extent of the law."

HMA will pay more than $260 million to resolve these allegations. One of its subsidiaries agreed to plead guilty to criminal fraud. The company that acquired HMA has agreed to operate under a corporate integrity agreement with the U.S. Department of Health and Human Services Office of the Inspector General. As part of the criminal resolution, HMA also entered into a three-year non-prosecution agreement.

This massive fraud scheme was exposed by whistleblowers. One will receive approximately $15 million as a reward for blowing the whistle. Another group will split a $12.4-million share in what was recovered. The whistleblower awards in the other cases have yet to be determined.

People in the healthcare field are often in a position to notice fraud against government programs. If you are considering blowing the whistle, protect your rights by contacting a lawyer who handles whistleblower law.

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