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Health System Settles False Claims Act Case for $98.15 Million

Community Health Systems, Inc. (“CHS”) has agreed to settle several whistleblowers’ qui tam lawsuits  that it violated the False Claims Act and the Stark Law. According to its website, CHS is one the nation’s largest operators of acute care hospitals.  An acute care hospital is a short-term hospital that provides diagnosis, care and treatment for a wide range of acute conditions.  Acute conditions are brief, but severe, episodes of illness that are the result of disease or trauma or recovery from surgery.  CHS’s affiliates own, operate or lease hospitals in 29 states, according to its website.

According to the Justice Department, seven different whistleblower lawsuits were filed under the qui tam provisions of the False Claims Act alleging that CHS violated the False Claims Act and that one of its affiliated hospitals, Laredo Medical Center, also violated the Stark Law.   Specifically, the government alleged that CHS knowingly billed government health care programs such as Medicare, Medicaid, and TRICARE for more costly inpatient services that should have been billed as less costly outpatient services.  The government claimed that the inpatient admissions of many government health care beneficiaries  were not medically necessary and therefore, the submission of claims for payment for the inpatient admissions were made in violation of the False Claims Act.   CHS agreed to settle these allegations for $89.15 million.

In addition, the government claimed that Laredo Medical Center wrongfully billed the government for services provided by a physician with whom the hospital had an improper financial relationship in violation of the Stark Law.  CHS agreed to settle the Stark Law claims for $9 million.

The qui tam lawsuits were brought in Texas, Tennessee, Illinois, Indiana, and North Carolina.  The whistleblowers are: Nancy Reuille, former nurse and Supervisor of Case Management in Indiana; Kathleen Bryant, the former Director of Health Information Management in Tennessee; Scott Plantz, a former emergency room physician in Texas; Rachel Bryant, formerly a nurse for CHS in Tennessee; Thomas Mason, a former emergency room physician in North Carolina; Bryan Carnithan, formerly the Emergency Medical Services Coordinator at a CHS hospital in Illinois; Amy Cook-Reska, a former employee of Laredo Medical Center; Sheree Cook, a former nurse; and James Doghramji, a former emergency room physician in Philadelphia.   In accordance with the qui tam provisions of the False Claims Act, the whistleblowers will share in a percentage of the settlement proceeds.