The U.S. Department of Justice recently joined eight false-claim lawsuits in five states against Florida-based Health Management Associates, which owns Stringfellow Memorial Hospital in Anniston and Gadsden's Riverview Regional Medical Center, both for-profit hospitals. The lawsuits allege the company exerted significant pressure on doctors to admit patients to emergency rooms needlessly, resulting in inflated or false claims to federal health care programs Medicare and Medicaid.
HMA's Alabama hospitals are not named in any of the lawsuits.
Attempts to reach Stringfellow and HMA officials for comment on the lawsuits were unsuccessful Friday.
About 170 physicians in 30 medical specialties work at the 125-bed Stringfellow Hospital.
The lawsuits come just as Tennessee-based hospital management company Community Health Systems received the go-ahead from the Federal Trade Commission to purchase HMA.
According to a recent Department of Justice press release, the lawsuits also allege HMA paid kickbacks in the form of bonuses or awarded contracts to physician groups staffing HMA emergency rooms, to encourage unnecessary patient admittances. The company also paid kickbacks to other physician groups to induce referrals, the lawsuits allege.
"Improper hospital admissions cost the government millions of dollars in unnecessary fees and subject patients to excessive treatment and needless risk, driving up the cost of health care," Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, is quoted as saying in the press release. "The government will pursue aggressively providers that boost their profits at the expense of Medicare and other government programs."
Since January 2009, the Justice Department has recovered a total of more than $17 billion through false claim cases, with more than $12.2 billion of that amount recovered in cases involving fraud against federal health care programs.
CHS announced Wednesday that the FTC had approved its $7.6 billion purchase of Health Management Associates, provided it sells two hospitals to avoid monopolies, one of which is Riverview. CHS already owns Gadsden Regional Medical Center. Stringfellow will remain as part of CHS.
The acquisition is set to be completed by the end of the month.
CHS is the second-largest for-profit hospital operator in the United States, owning 135 hospitals in 29 states. Once the purchase is completed, CHS will own 204 hospitals.
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.