Lancaster Physican Group Pays Over $4 Million To Resolve Kickback Claims Involving HMA Hospitals

PHILADELPHIA – The Justice Department today announced settlements with Physician’s Alliance Ltd. (PAL), for allegedly receiving illegal remuneration in exchange for patient referrals to hospitals owned by the now-defunct Health Management Associates (HMA).

PAL, headquartered in Lancaster, Pennsylvania, and three of its executives, Lee Meyers, Michael Warren, M.D. and Wallace Longton, M.D., agreed to resolve allegations that, from 2009 until 2012, PAL accepted illegal remuneration from HMA to refer patients to two HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center.  Under the settlement, PAL and its executives will pay $4 million plus a percentage of proceeds from the sale of PAL’s interest in a joint venture with HMA.       

“These physicians and executives prioritized their own financial interests over the needs of their patients,” said United States Attorney Louis D. Lappen. “Such conduct compromises patient care and undermines the integrity of our nation’s federal health care programs. This settlement should serve as a warning to all providers who allow financial incentives to displace their medical judgment.”

 “The Hippocratic oath enjoins physicians to do no harm, not maximize profits by pocketing illegal referral bribes,” said Nicholas DiGiulio, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Physicians that stray from their oath should not be surprised when they come under law enforcement scrutiny.” 

Under the qui tam, or whistleblower, provisions of the False Claims Act, private individuals may sue on behalf of the government for false claims and share in any recovery.   George E. Miller and Michael J. Metts, former HMA hospital executives, filed suit in the Eastern District of Pennsylvania alleging the scheme between PAL and HMA. Miller’s and Metts’ share of the settlement has not yet been determined.

The settlement was the result of a civil prosecution by the United States Attorney’s Office for the Eastern District of Pennsylvania led by Assistant United States Attorneys Charlene Keller Fullmer and Veronica Finklestein. The investigations were conducted by the Office of Inspector General of the United States Department of Health and Human Services and the Federal Bureau of Investigation. 

The case is captioned United States ex rel. Miller & Metts v. HMA, et al, Case No. 14-00339 (D.D.C.).  

The claims resolved by the settlements are allegations only, and there has been no determination of liability.