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Business Observer Wednesday, Sep. 26, 2018 3 years ago

Hospital system to pay $260 million in penalties

Former Naples-based HMA resolves charges related to fraudulent hospital charges to government health care programs.

FORT MYERS — The U.S. Justice Department has ordered Health Management Associates, formerly a major hospital chain headquartered in Naples, to pay more than $260 million to resolve criminal charges and civil claims in a health care fraud case that dates back at least seven years and involved a pair of Charlotte County medical centers. 

HMA agreed to pay $93.5 million to resolve the civil allegations, with the federal government receiving $88 million and Florida receiving $5.5 million, according to a statement from the U.S. Attorney's office. The remaining $166.5 million will reconcile the criminal charges. The settlement was announced in a statement from multiple government offices, including U.S. Attorney Maria Chapa Lopez of the Middle District of Florida, based in Tampa. 

The government alleged HMA knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services; 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. 

The civil settlement resolves, among other allegations, that from 2003 through 2011 two HMA hospitals, 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, which allegedly covered overhead and administrative costs incurred by the group for its management of a Charlotte Regional physician, authorities contended. HMA also provided another local physician with free rent and upgrades to his office space, officials further alleged. 

Federal laws, including the Anti-Kickback Statute and the Stark Law, prohibit hospitals from providing financial inducements to physicians for referrals.

Community Health Systems acquired HMA in January 2014, after the alleged conduct at HMA occurred.  Since July 2014, HMA has been operating under a Corporate Integrity Agreement (CIA) between CHS and the U.S. Department of Health and Human Services Office of Inspector General, the release states. 

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