Health Management Associates Target of Increased Government Intervention in Eight False Claims Act Lawsuits By Tod Aronovitz | 03/04/14 | 0 Comment

The government is escalating its involvement in eight false claims lawsuits brought against Health Management Associates Inc. (HMA) in six states, according to a recent U.S. Department of Justice press release.

Whistleblowers in the cases allege that the for-profit hospital chain, headquartered in Naples, Fla., inflated Medicare claims by admitting patients who didn’t need inpatient care, and paid kickbacks to physician groups to encourage the unnecessary admission of patients. HMA operates 71 hospitals in 15 states, including Florida.

We first alerted blog readers to whistleblower cases at HMA in a January 6 article titled, “Health Management Associates Target of Whistleblower Cases.” At the time it was reported that the government planned to intervene in four cases.

In one of the lawsuits, the government also joined in the allegations that former CEO Gary Newsome directed the company’s corporate practice of coercing ER doctors and hospital administrators to elevate inpatient admission rates, regardless of medical necessity.

All the lawsuits claim that HMA’s corporate officers, under the leadership of Newsome, exerted significant pressure on ER doctors to admit patients, resulting in the submission of inflated or false claims to federal health care programs. One lawsuit also argues that patients were improperly admitted for scheduled surgical procedures. Further complaints reveal that kickbacks were paid to physician groups staffing HMA emergency rooms to encourage the unnecessary admission of patients. Kickbacks were also supposedly paid to other physician groups in order to generate referrals to HMA.

In Florida, for example, HMA purportedly remunerated Primary Care Associates, a physician practice group in Port Charlotte, Fla., by providing free office space and staffing as well as direct payments in exchange for referrals to two HMA hospitals in Florida.

Among its other infringements, HMA appears to be in violation of two statutes in these cases: the Anti-Kickback Statute and Stark Statute. Designed to have the best interests of the patient in mind, the Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. 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.

“This intervention decision marks the culmination of a lengthy and comprehensive investigation into a variety of serious fraud allegations against one of our district’s largest health care providers,” said Acting U.S. Attorney for the Middle District of Florida A. Lee Bentley III. “We hope that this case will serve as a reminder to our provider community that this office is fully engaged in the struggle against misconduct of this kind.”

“Unlawful financial relationships between hospitals and physicians solely to increase referrals are, unfortunately, a common practice that corrupts the health care system,” said U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer. “The system also suffers a direct financial hit when hospitals fraudulently increase admissions where they are not indicated, solely to benefit hospitals’ bottom line. We will not relent in our efforts to combat these kinds of fraudulent schemes and recover funds for the Medicare program.”

The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they believe that defendants submitted false claims for government funds and to receive a share of any recovery. The False Claims Act also allows the government to intervene in such lawsuits to underscore that the allegations have serious merit.

The eight lawsuits are pending in the Southern and Middle Districts of Florida, Middle District of Georgia, Northern District of Illinois, Western District of North Carolina, Eastern District of Pennsylvania, and District of South Carolina.

How to Report Miami Medicare Fraud
Healthcare or medical billing employees who have inside knowledge of questionable Medicare billing practices can file a confidential legal claim under the False Claims Act. By acting as a “whistleblower” in what is known as a “qui tam” lawsuit, a private party may collect between 10 to 30 percent of the amount recovered, depending on how the case is prosecuted.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm

The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with Miami whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss a case.