(Reuters) - Shares of Health Management Associates Inc fell about 5 percent on Monday after the television news program 60 Minutes aired a story describing aggressive patient admissions policies allegedly pursued at the company’s U.S. hospitals.
The story included interviews with several former employees of the hospital chain who said they were pressured to meet quotas for admitting patients.
HMA Senior Vice President Alan Levine told 60 Minutes the allegations were “absolutely wrong”.
In a statement released after the 60 Minutes broadcast, the Naples, Florida-based hospital company said the report found no issues with the quality of care at its hospitals and relied entirely on “disgruntled” former employees and contracted physicians.
“Neither 60 Minutes nor the physicians interviewed identified any admission decision in which a physician’s medical judgment was overridden by an HMA executive, much less to defraud Medicare,” HMA said.
HMA, which operates 70 hospitals in 15 states, said admissions rates from its emergency rooms were in line with industry standards and consistent over several years.
The company held a conference call for investors on Friday ahead of the 60 Minutes report in which Levine said that HMA’s review showed there was no basis for an allegation of increased admissions through the company’s emergency departments.
CRT Capital Group analyst Sheryl Skolnick cut her rating on HMA shares to “sell” from “fair value”, citing the Medicare fraud allegations in the 60 Minutes report.
“We believe there is significantly greater risk of a deeper/wider (government) investigation and a substantially higher risk that HMA may have to pay bigger fines to settle it,” Skolnick wrote in a note to clients.
Among those interviewed for the television show was a former director of compliance for HMA, Paul Meyer, who sued the company for wrongful termination. Meyer accused the company of committing Medicare fraud by billing the government for hospital stays that did not meet government standards for admission or reimbursement.
HMA said it hired an outside law firm to investigate Meyer’s allegations, but it found no evidence to support an allegation of fraud.
HMA shares were down 38 cents, or 4.8 percent, at $7.57 in afternoon trade on the New York Stock Exchange.
Reporting By Susan Kelly; Additional reporting by Bill Berkrot in New York; Editing by Andrew Hay and Marguerita Choy