A settlement has been reached in a whistleblower class action lawsuit brought against Community Health Systems Inc (CHS) who is accused of knowingly billing government health care programs for inpatient services that should have been billed as outpatient or observation services.
The settlement resolves lawsuits filed by several whistleblowers and their share amounts of the settlement have not been determined.
The originally filed whistleblower complaint was filed in January of 2009. Over time additional whistleblower complaints were filed and consolidated. The complaints alleged that from 2005 through 2010, CHS increased inpatient admissions of Medicare, Medicaid and the Department of Defense’s (DOD) TRICARE program beneficiaries over the age of 65 who originally presented to the emergency departments at 119 CHS hospitals. Additionally the complaints alleged that the inpatient admission of these beneficiaries was not medically necessary, and that the care needed by, and provided to, these beneficiaries should have been provided in a less costly outpatient or observation setting. A settlement of $89.15 was agreed upon to resolve these particular allegations.
An additional settlement amount of $9 million was agreed upon to resolve the allegations that from 2005 through 2010, one of CHS’s affiliated hospitals, LMC in Laredo, Texas, presented false claims to the Medicare program for certain cardiac and hemodialysis procedures performed on a higher cost inpatient basis that should have been performed on a lower cost outpatient basis. The government also alleged that from 2007 through 2012, LMC improperly billed Medicare for services referred to LMC by a physician who was offered a medical directorship at LMC, in violation of the Stark Law.
