The Department of Justice and the owners of 16 hospitals have reached an agreement to settle False Claims Act allegations related to their use of intensive outpatient psychotherapy services from 2005 to 2013. The federal authorities claim the organizations didn't meet various requirements for Medicare billing.
Of the hospitals, 14 were under the banner of Health Management Associates until early last year and are now owned by Community Health Systems. A 15th hospital in Mississippi also is owned by CHS, while the last of the bunch is a 60-bed facility in North Texas. CHS will pay $210,000 for the Mississippi settlement while HMA's tab runs to $15 million.
“This case demonstrates that the U.S. Attorney’s Office for the Eastern District of Arkansas will aggressively pursue civil health care fraud cases, where the integrity of the Medicare system has been undermined,” said U.S. Attorney Christopher Thyer of the Eastern District of Arkansas. “Medical care providers who abuse Medicare hurt all taxpayers, and today’s announcement highlights our commitment to protecting our national health care system, as well as the Arkansans who depend on it.”
Read the full DOJ statement here.
Community Health Systems executives have told the leaders of Bert Fish Medical Center in Northeast Florida that they cannot follow through on the acquisition talks started last summer by Health Management Associates. Officials at nonprofit Bert Fish chose HMA as their preferred partner shortly before CHS said it would pay more than $7 billion for HMA.
Days after Community Health Systems put a bow on its multibillion-dollar acquisition of Health Management Associates, hedge fund manager Larry Robbins has tallied up his holdings in the combined company. Robbins' Glenview Capital Management, which last year played a big role in driving HMA to the auction block, now owns 10.7 percent of CHS, which should make it the company's largest shareholder by a comfortable margin. CHS shares (Ticker: CYH) were up slightly to $40.60 in early Friday trading.
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