Former executives of two Lancaster County hospitals will receive $12.4 million for their roles in bringing to light an alleged kickback scheme at the hospitals, according to the U.S. Department of Justice.
Health Management Associates Inc., which owned the for-profits Lancaster Regional Medical Center and Heart of Lancaster Regional Medical Center, has agreed to pay more than $260 million to resolve multiple allegations made against HMA-owned hospitals, according to a DOJ press release.
The release says $55 million of the settlement is for the local hospitals’ roles in the alleged kickback scheme that officials say took place from 2009 to 2012. The hospitals have changed hands several times since then and are now nonprofits UPMC Pinnacle Lancaster and UPMC Pinnacle Lititz. UPMC Pinnacle has no connection to the lawsuit.
The whistleblowers were George E. Miller and Michael J. Metts, the local hospitals’ former CEO and chief financial officer, respectively.
The release says the deal resolves allegations that the two county hospitals “billed federal health care programs for services referred by physicians with whom the facilities had improper financial relationships.” LNP reported in December that the former Physician’s Alliance Ltd. and its executives Lee Meyers, Dr. Michael Warren and Dr. Wallace Longton agreed to resolve allegations by paying $4 million plus an undisclosed percentage of proceeds from the sale of the company’s interest in the two local hospitals.
In addition, officials said from roughly 2008 to 2012 HMA hospitals “knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services, paid remuneration to physicians in return for patient referrals, and submitted inflated claims for emergency department facility fees.”
The lawsuits that prompted the settlement were made public in 2014, with negotiations underway since then.
Tennessee-based Community Health Systems Inc. acquired HMA in 2014. It issued a statement that the settlement is expected to be paid in October.