(Adds attorney comment)
Aug 4 U.S. hospital operator Community Health
Systems Inc said on Monday it has agreed to pay more
than $89 million to settle a government investigation over
billing practices at 119 of its facilities.
The U.S. Department of Justice since 2011 had been
investigating whether Community hospitals charged government
health plans, such at Medicare and Medicaid, for expensive
short-stay admissions via emergency rooms that should have been
billed as outpatient or observation cases. The probe covered the
period from January 2005 to December 2010.
Under the terms of the settlement, Community agreed to pay
$88.26 million to resolve the federal share of the claims and an
additional $892,500 to states for their portion of Medicaid
claims, the company said.
The settlement involves no finding of improper conduct by
Community Health Systems or its affiliated hospitals, and the
company has denied any wrongdoing, it said.
"CHS's conduct interfered with physician decision-making for
the purpose of bolstering its bottom line at the expense of the
American taxpayers," Matthew Organ of the law firm Goldberg Kohn
said in an emailed statement. Organ represented Dr. Scott
Plantz, one of the whistleblowers in the original civil lawsuit
that led to the government investigation.
"The one and only factor that should influence a physician's
decision to admit a patient to the hospital should be the
patient's best interest, not the amount of money the hospital
can earn," he added.
The Franklin, Tennessee-based company had previously set
aside a $102 million reserve fund to cover the settlements and
related legal costs.
Community said it agreed to enter a five-year corporate
integrity agreement that will be incorporated into its existing
The settlement does not cover government investigations into
hospitals formerly affiliated with Health Management Associates
that began before Community acquired HMA in January.
(Reporting by Bill Berkrot; Editing by Leslie Adler)