- Community Health Systems Professional Services Corporation and three affiliated New Mexico hospitals have been hit with a $75-million fine to resolve allegations that the hospitals made illegal donations to county governments in order to receive more funds through a no-longer active matching program.
- "For every dollar a CHS hospital donated to the county, it received an amount equivalent to the 'donation' plus $3 back in supplemental Medicaid payments—making it a very lucrative investment for CHS and its hospitals," said Peter W Chatfield, an attorney with Phillips & Cohen, who brought the case on behalf of a whistleblower.
- The qui tam complaint was made by former CHSPSC revenue manager, Robert Baker; the federal government also took over the lawsuit for some of Baker's allegations. Baker will receive $18,671,561 through the recovery.
According to federal officials, from August 1, 2000 through December 31, 2010, CHS made improper donations to the three counties of Chaves, Luna and San Miguel, the locations of Eastern New Mexico Medical Center, Mimbres Memorial Hospital and Nursing Home and Alta Vista Regional Medical Center, respectively. The funds were then used by the state, allegedly with CHS' knowledge but without the state's, to acquire federal matching payments under the now-defunct Sole Community Provider (SCP) program, which supplemented Medicaid reimbursements in rural counties until it was discontinued in 2014. According to federal law, the state's 25% "matching" share of program payments could be made up only of state or county funds, not private donations.
"Congress expressly intended that states and counties use their own money when seeking federal matching funds in order to encourage them to join the federal government in ensuring that Medicaid funds are spent on the needs of beneficiaries," said Justice Department Civil Division chief Joyce R. Branda. "When private hospitals violate the rules against hospital donations funding the state share, that important protection of the Medicaid program is destroyed."
CHS, which manages more than 200 affiliated hospitals in 29 states, in the settlement agreement denies the allegations and says that it did not engage in wrongful conduct.