YOUNGSTOWN, Ohio -- Community Health Systems Inc., which operates four hospitals in the Mahoning and Shenango valleys, has entered into a settlement agreement with the U.S. Department of Justice to resolve the federal investigation into short stay admissions through emergency departments at some of its affiliated hospitals.
In 2011, the government began in investigating whether 119 CHS hospitals -- none of them operating locally -- billed Medicare, Medicaid and TRICARE for certain inpatient admissions from January 2005 to December 2010 that the government believed should have been billed as outpatient or observation cases. The Franklin, Tenn.-based company will pay $88.3 million to resolve all federal government claims, including Medicare, TRICARE and the federal share of the Medicaid claims, and pay an additional $892,500 to the states for their portions of the Medicaid claims.
CHS owns ValleyCare Health System of Ohio, which includes Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland. Earlier this year it acquired Sharon Regional Health System in Sharon, Pa.
In a prepared statement announcing the settlement, the company said the agreement reflects its “desire to end the investigation … and to avoid the significant expense and distraction of litigation.” Under the agreement’s terms, there is no finding of improper conduct by CHS or its affiliated hospitals, and the company denies any wrongdoing.
“Our organization is dedicated to high ethical standards as we strive to operate in a complex and ever changing regulatory environment,” Wayne T. Smith, chairman and CEO, said in the company’s statement.
“The question of when a patient should be admitted to a hospital is, and always has been, a matter of medical judgment by the individual physician responsible for a patient’s care. Unfortunately, shifting and often ambiguous standards make it extremely difficult for physicians and hospitals to consistently comply with the regulations,” Smith said. “We are committed to doing our best, despite these challenges. Because this is an industrywide issue, we hope the government will work to devise sound and reasonable rules for the important decision about whether to admit an individual for inpatient care, and we appreciate the opportunity to engage in meaningful dialogue with the government over these incredibly complicated issues.”
As is customary at the conclusion of many government investigations, CHS said, it has entered into a five-year "corporate integrity agreement" that will be incorporated into its existing compliance program. CHS established the compliance program on its own initiative in 1997 and has since "maintained robust training, reporting and review processes," the company said.
The settlement will also result in the unsealing and dismissal of actions filed in Illinois, Tennessee, North Carolina and Texas, as well as the previously unsealed case in Indiana. Two of these cases also name Health Management Associates as defendants and were partially unsealed in December 2013 when the government intervened in those and six other cases pending against HMA.
The settlement also resolves the government’s investigation into a CHS-affiliated hospital in Laredo, Texas. The government’s review in Laredo centered on whether the hospital submitted claims for inpatient procedures that should have been billed as outpatient procedures as well as the financial relationship between the hospital and a member of its medical staff. The hospital has agreed to pay $9 million to resolve this investigation. The new corporate integrity agreement" includes Laredo-specific reviews of physician financial relationships.
The settlement agreement does not cover current government investigations into certain hospitals formerly affiliated with HMA, which were initiated before Community Health Systems acquired HMA in January 2014. The company said it continues to cooperate with the government and is working to bring resolution to these investigations.
SOURCE: Community Health Systems.
Published The Business Journal, Youngstown, Ohio.
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