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Press Release

United States Settles Kickback Allegations With Georgia Hospital

For Immediate Release
U.S. Attorney's Office, Middle District of Georgia

WASHINGTON – The Department of Justice announced today that the United States has settled a False Claims Act lawsuit with Health Management Associates (HMA) and Clearview Regional Medical Center for $595,155.  The lawsuit filed in the Middle District of Georgia alleged that from 2008 to 2009 the hospital paid kickbacks to an obstetric clinic that served primarily undocumented Hispanic women, in return for referral of those patients for labor and delivery at the hospital.  The hospital then billed the Medicaid program in Georgia for the services provided to the referred patients.  Clearview, located in Monroe, Georgia, was named Walton Regional Medical Center and was owned by hospital operator HMA during the time period relevant to the lawsuit.  Clearview is now owned by Community Health Systems (CHS), which purchased HMA in January 2014.

“This resolution illustrates our commitment to ensuring that health care providers who pay kickbacks in return for patient referrals are held accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Schemes such as this one corrupt the health care system and take advantage of vulnerable patients.”

“The Medicaid program is a vital part of the government’s efforts to make sure that everyone has access to health care,” said U.S. Attorney of the Middle District of Georgia Michael Moore. “Instead of providing health care services to expectant mothers in its area and receiving payment for those services from Medicaid, the hospital participated in a scheme to pay kickbacks in exchange for having pregnant women from outside its market funneled to its facility with the goal of increasing the amount of Medicaid money the hospital could claim.”

The United States’ complaint alleges that HMA’s Walton Regional Medical Center paid kickbacks to Hispanic Medical Management doing business as Clinica de la Mama (Clinica) and related entities, in return for Clinica’s agreement to send pregnant women to Walton Regional for deliveries paid for by Medicaid, in violation of the federal Anti-Kickback Statute.  The kickbacks were disguised as payments for a variety of services allegedly provided by Clinica.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.  The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.

“Hospitals that pay kickbacks to clinics for referrals of undocumented pregnant patients are taking advantage of both these vulnerable women and the taxpayer-funded Medicaid program,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Atlanta Regional Office.  “Our agency is dedicated to investigating such corrosive kickback schemes, which undermine the public’s trust in medical institutions and the financial health of government health care programs.”

 “The FBI is proud of the role it played in bringing forward today’s settlement, said Special Agent in Charge J. Britt Johnson of the FBI Atlanta Field Office.  “The FBI will continue to provide significant investigative assets and resources to ensure that the integrity of federally funded health care programs such as Medicaid are protected from providers who would abuse them.”

As part of the settlement, HMA and Clearview will pay the State of Georgia an additional $396,770 to settle Georgia’s claims under the Georgia False Medicaid Claims Act.  The Medicaid program is a jointly funded federal-state program that provides health care to the poor and disabled.  Although undocumented aliens are not eligible for regular Medicaid coverage, the Medicaid program provides coverage for emergency conditions, including childbirth, for undocumented aliens.

The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.  The False Claims Act also permits the government to intervene in such lawsuits, as it did in this case against Walton Regional, as well as several other defendants, including Clinica de la Mama and four hospitals owned by Tenet Healthcare Corporation.  The litigation against the non-settling defendants is ongoing.  The relator, Ralph D. Williams, the chief financial officer of Walton Regional from April 2009 to October 2009, will receive $119,031 from the United States’ portion of the settlement.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Offices for the Middle and Northern Districts of Georgia, HHS-OIG, FBI and the Office of the Attorney General for the State of Georgia.

The case is captioned United States ex rel. Williams v. Health Mgmt. Assocs. Inc., et al., No. 3:09-CV-130 (M.D. Ga.).

The claims resolved by this settlement are allegations only and there has been no determination of liability.

Updated June 9, 2015