DOJ Accuses Community Health Network of Medicare Fraud

The Department of Justice (DoJ) announced on Tuesday that it has filed a complaint against Community Health Network following a whistleblower lawsuit accusing the Indianapolis-based health system of violating the Stark Law and committing Medicare fraud.

The announcement stated that the federal department filed its own complaint based on the whistleblower accusations from finance and operations executive Thomas Fischer who accused Community Health Network of employing physicians well above fair market value in order to encourage then to steer patients to Community Health Network hospitals, ambulatory surgical centers, and other facilities. 

Fischer also alleged in his whistleblower lawsuit that Community Health Network paid doctors substantial kickbacks in the form of inflated salaries, bonuses, and investment opportunities to encourage patients to go to Community hospitals.

These financial relationships violated the Stark Law, which prohibits hospitals from billing Medicare for services referred by a physician with whom the hospital as an improper financial relationship that does not meet a statutory or regulatory exception, DoJ explained. The federal department believes the health system submitted claims to Medicare knowing that the claims for the referred services did not qualify for reimbursement.

“Improper financial relationships between hospitals and physicians corrupt clinical decision-making, threaten patient care, and ultimately drive up Medicare costs,” Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division stated in the announcement.  “We are committed to eliminating these improper inducements and thereby ensuring the Medicare program remains fiscally sound to serve our nation’s senior citizens.”

In response to the DoJ’s announcement, Fischer commended the government for filing its own complaint against the health system.

"I am grateful for all the hard work the Department of Justice invested in investigating these issues," he stated in a press release from his litigation team at Joseph Greenwald & Lakee, PA. "At its core, the problems I reported are not about arcane financial dealings; they affect real lives of patients, hospital employees and the excessive cost of healthcare services in the Indianapolis marketplace."

Fischer’s lead counsel Jay P. Holland added that the DoJ’s complaint also demonstrates the seriousness of the accusations again Community Health Network.

"The government's intervention demonstrates how seriously it takes the allegations Tom Fischer raised,” he said. Fischer's Indianapolis–based attorney Kathleen DeLaney added, "as the case goes forward, we look forward to continuing to work with the government to hold Community Health Network responsible for any illegal and retaliatory conduct."

Community Health Network did not immediately respond to RevCycleIntelligence.com with a comment regarding the complaint. However, the health system did tell local news source Fox59 that the organization is “committed to upholding the highest regulatory and ethical standards in all our business practices, including physician compensation.”

“We have cooperated fully with the government’s requests leading up to this point, and we are disappointed with their decision,” the spokesperson continued. “We believe that it is a waste of the government’s time and resources to pursue these meritless claims.”

DoJ’s Civil Division and the US Attorney General’s Office for the Southern District of Indiana will handle the case, with assistance from HHS’ Office of the Inspector General. The case is captioned United States and the State of Indiana ex rel. Thomas Fischer v. Community Health Network, Inc., et al. No. 1:14-cv-1215 (RLY-DKL) (S.D. Ind.).