The United States Department of Justice (“DOJ”) has settled seven whistleblower lawsuits against Community Health Systems, Inc. (“CHS”) for a total of over $98 million. One was brought by Dr. Thomas L. Mason, M.D., a board-certified emergency physician, who had filed a whistleblower case against CHS in the United States District Court for the Western District of North Carolina.
The alleged improper conduct by CHS relates to the inpatient admission and treatment of government healthcare program beneficiaries 65 and older who originally presented to the Emergency Department(s) (“ED”) of 119 CHS hospitals located throughout the United States. The settlement covered claims paid by Medicare Part A for those patients whose hospital stay was two (2) days or less and who were treated for the following conditions: chronic obstructive pulmonary disease; heart failure & shock; cardiac 4 arrhythmia & conduction disorder; syncope & collapse; chest pain; esophagitis, gastroenterology & misc. digestive disorders; nutritional and miscellaneous metabolic disorders; kidney and urinary tract infections.
CHS is publicly traded on the NYSE as “CYH.” In early 2014, CHS acquired Florida-based Health Management Associates, creating one of the largest for-profit hospital companies in the country. According to SEC filings, CHS directly or indirectly owns and operates 206 hospitals in twenty-nine states, and has nearly $27 billion in assets. The settlement does not include hospitals that CHS acquired from Health Management Associates (HMA) in January 2014.
The Federal Government contends that CHS, from January 1, 2005 through December 31, 2010, knowingly submitted, or caused to be submitted, claims for payment to government healthcare programs for certain inpatient admissions of government healthcare program beneficiaries that were medically unnecessary and should have been billed as outpatient or observation services.
In all, seven whistleblowers, including Dr. Mason, filed lawsuits against CHS pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C._3730(b).
The False Claims Act allows private persons (known as “relators”) to file a lawsuit against those businesses and individuals that have directly or indirectly defrauded the federal government.