Former Naples-based hospital chain to pay over $260M to resolve allegations

Health Management Associations, formerly a major US hospital chain located in Naples, Fla., will pay over $260-million to resolve criminal charges and civil claims related to a scheme to defraud the United States, the Justice Department announced today.

The government alleged that HMA knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services. They also inflated claims for emergency department facility fees and operated hospitals, including two in Port Charlotte, which paid illegal remuneration to physicians in return for patient referrals. 

Federal laws, including the Anti-Kickback Statute and the Stark Law, prohibit hospitals from providing financial inducements to physicians for referrals. These provisions are designed to ensure that physician decision-making is not compromised by improper financial incentives.

The civil settlement resolves, that during the period from 2003 through 2011, two HMA hospitals in Florida, the Charlotte Regional Medical Center and the Peace River Medical Center, billed federal health care programs for services referred by physicians to whom HMA provided remuneration in return for patient referrals. To induce patient referrals, Charlotte Regional provided a local physicians’ group with free office space and staff, as well as direct payments. HMA also provided another local physician with free rent and upgrades to his office space.

The government’s resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).