A massive hospital chain with thousands of employees in Cool Springs and Antioch is on the hook for a quarter-billion-dollar settlement with the federal government. The payout is larger than expected for Community Health Systems, but it also lifts a cloud that has been hanging over the company by protecting it from criminal prosecution.
A company
acquired by Community Health in 2014 has been the cause of most of its financial problems in recent years. They knew Florida-based Health Management Associates was in lots of legal trouble, but they were hoping to pay less than $262 million, which was the maximum set aside to resolve whistleblower claims.
HMA was accused of overcharging government insurance programs for outpatient care and paying physicians kickbacks for referrals. The Justice Department alleged a “corporate-driven scheme” in which physicians were incentivized illegally to admit more patients into the hospital, whether they needed the level of treatment or not.
“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,” Assistant Attorney General Brian Benczkowski said
in a statement. “Hospital operators that improperly influence a physician’s medical decision-making in pursuit of profits do so at their own peril.”
Despite its financial difficulties, Community Health says it is prepared to pay the full sum in October, as required.
Community Health’s chairman and CEO Wayne Smith says
in a statement that he’s pleased to move on from the “distraction” of litigation.
“Since acquiring HMA in 2014, it has been our goal to resolve the government’s investigation into all of these allegations,” Smith says. “As an organization, we are committed to doing our very best to always comply with the law in what is a very complex regulatory environment and to operate our business with integrity, ethical practices and high standards of conduct.”
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