The U.S. Department of Justice announced that Health Management Associates, LLC (HMA) will pay more than $260 million to settle allegations raised in several “qui tam” (whistleblower) / False Claims Act lawsuits alleging that HMA pressured hospital emergency room (ER) doctors to increase the rate of ER-to-hospital admissions irrespective of medical necessity, paid remuneration to physicians for patient referrals, and inflated its Medicare claims for emergency department facility fees.

As part of the settlement, HMA entered into a three-year Non-Prosecution Agreement in connection with its admissions scheme, under which it agreed to pay a $35 million monetary penalty and to cooperate in the Justice Department’s investigation. In addition, an HMA subsidiary, Carlisle HMA, LLC, has agreed to plead guilty to one count of conspiracy to commit healthcare fraud.

One of the lawsuits settled by the agreement is a South Carolina lawsuit (US ex rel. Meyer & Cowling et. al v. HMA, Newsome, Emergency Medical Services Corp. and EmCare, 11-cv-01713  (D.S.C. 2011)) that has been pending since 2011. 

The Meyer & Cowling lawsuit was filed under seal on July 15, 2011 in the U.S. District Court in South Carolina by the Washington, D.C. whistleblower law firm Vogel, Slade & Goldstein and the Columbia, S.C., law firm Wyche, P.A. The South Carolina qui tam lawsuit was filed by Michael Cowling, a former HMA Division vice-president who served as CEO at three HMA hospitals, and Jacqueline Meyer, a former administrator for EmCare, the nation’s leading provider of emergency room physician services and a major contractor for HMA. The complaint alleges that both Cowling and Meyer were fired by their employers in 2009 and 2011 respectively, after they each refused to coerce ER doctors to admit more patients.

Meyer and Cowling also filed qui tam whistleblower claims against HMA’s former president and CEO Gary Newsome. Their complaint alleges that Newsome ordered hospital administrators to “interrogate” ER physicians about “missed” admissions and that he warned hospital CEOs whose hospitals were below admissions benchmarks that they would be fired unless their admissions rates rose. The Department of Justice has joined in the lawsuit against Newsome and the case against Newsome is ongoing. Wyche Attorney John Moylan noted that he “is proud to have represented courageous whistleblowers who stood up and did the right thing to save taxpayer dollars.”

The Meyer/Cowling lawsuit was filed under the qui tam provisions of the False Claims Act that authorize individuals with information about fraud against the government to bring a lawsuit on behalf of the government and to share in the government recoveries. Ms. Meyer and Mr. Cowling are represented by Janet Goldstein in the Washington, D.C. law firm, Vogel, Slade & Goldstein, LLP, and John Moylan in the Columbia, S.C. law firm Wyche, P.A.