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Allegations brought by insiders claiming kickbacks, sham business deals
The eight False Claims Act lawsuits being pursued against Health Management Associates (HMA) illustrate the risk that hospital executives take when they aggressively seek increased revenue without adequately assessing the potential for fraud charges, say healthcare fraud experts who are watching the case closely.
The government has intervened in eight False Claims Act lawsuits against the Naples, FL-based hospital chain. It alleges that HMA billed federal healthcare programs for medically unnecessary inpatient admissions from the emergency departments at HMA hospitals and paid remuneration to physicians in exchange for patient referrals, the Justice Department announced recently.
The government also has joined in the allegations in one of these lawsuits that Gary Newsome, HMA’s former CEO, directed HMA’s corporate practice of pressuring emergency department physicians and hospital administrators to raise inpatient admission rates, regardless of medical necessity. (See the stories on p. 39 and p. 40 for more on the allegations.)
HMA operates 71 hospitals in 15 states: Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Missouri, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Washington and West Virginia.
HMA’s practices violated the Anti-Kickback Statute, which prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs, the government claims. The Stark Statute prohibits a hospital from submitting claims for patient referrals made by a physician with whom the hospital has an improper financial arrangement, the government says.
Everyone can blow the whistle
One of the most important lessons for risk managers from the HMA case concerns the risk posed by whistleblowers, says John G. Martin