- Two physician groups agreed Tuesday to more than $33 million in settlements with the Department of Justice (DOJ) for alleged illegal remuneration for patient referrals to Health Management Associates (HMA) hospitals.
- EmCare, a company which provides doctors to hospitals to staff emergency departments, agreed to pay $29.6 million to resolve allegations that it recommended patients be admitted to HMA hospitals on an inpatient basis rather than outpatient from 2008 to 2012 in exchange for remuneration from HMA.
- Separately, Physician’s Alliance Ltd (PAL) and its executives agreed to pay $4 million and a percentage of future proceeds from a sale of PAL’s partnership with the now-defunct HMA for similar allegations between 2009 and 2012.
The DOJ notes that Medicare pays at least three times more for inpatient rather than outpatient care. Protecting Medicare program integrity and financial stewardship was named on of the top 10 management challenges facing HHS in a recent HHS Office of Inspector General report.
“These physicians prioritized their own financial interests over the needs of their patients,” said U.S. Attorney Louis Lappen for the Eastern District of Pennsylvania. “Such conduct compromises patient care and undermines the integrity of our nation’s federal health care programs. This settlement should serve as a warning to all providers who allow financial incentives to displace their medical judgment.”
The EmCare settlement resulted from a whistleblower lawsuit filed by Thomas Mason and Stephen Folstad on behalf of the government. The two owned a medical practice, MEMA, that previously supplied physicians to two HMA hospitals. In the PAL lawsuit, two former HMA executives, George Miller and Michael Metts, filed on behalf of the government alleging the PAL and HMA arrangement.
The action is the latest scrutiny of EmCare following a New York Times article. In August, a group of investors sued EmCare parent Envision Healthcare claiming the company did not tell them about EmCare's billing practices. In September, Sen. Claire McCaskill (D-Mo.) raised concerns about EmCare's alleged practice of billing emergency room patients for out-of-network charges in a letter to Envision CEO Chris Holden.
HHS OIG previously announced that the federal government had recovered $3.3 billion in fraudulent healthcare claims in 2016.