Health Management Associates agreed to pay more than $ 260 million and entered a deferred prosecution agreement to settle criminal charges for allegedly paying physicians kickbacks and defrauding Medicare, Medicaid and other federal programs, the Justice Department said Tuesday.
HMA, which was acquired by the for-profit hospital Community Health Systems in 2014, allegedly paid physicians in exchange for patient referrals and submitted inflated claims for emergency department facility fees to federal health insurance programs, federal prosecutors said.
The agreement also resolves several outstanding civil claims against the hospital operator, DOJ said. An HMA subsidiary that operated under the name Carlisle Regional Medical Center additionally agreed to plead guilty to one count of conspiracy to commit health care fraud.
“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.”
Community Health Systems did not immediately respond to CNBC’s request for comment.
Shares of Community Health Systems rose more than 3 percent in after-market trading. Community Health Systems’ shares have fallen nearly 20 percent so far this year.
The federal government has been cracking down on alleged overbilling practices by health-care companies. Last year, the federal government sued UnitedHealth Group for allegedly overcharging Medicare by hundreds of millions of dollars.
The suit was eventually dropped.
“Billing for unnecessary hospital stays wastes federal dollars,” Assistant Attorney General Joseph Hunt said in a statement. “In addition, offering financial incentives to physicians in return for patient referrals undermines the integrity of our health care system. Patients deserve the unfettered, independent judgment of their health care professionals.”