United States Attorney's Office recovers over twenty million dollars in case against Community Health Network

Josh J. Minkler, United States Attorney, announced today a $20,324,902.22 civil settlement with Community Health Network (ACHN), a non-profit health system with more than 200 sites of care and affiliates throughout the State of Indiana.  The settlement will resolve allegations that CHN submitted false claims to the Medicare and Medicaid programs.

"The civil False Claims Act was created to serve as a tool for combating fraud, waste and abuse in federally funded programs," Minkler stated.  "This recovery sends the message that health care providers must comply with all applicable state and federal regulations when billing the United States Government for services, or they will face consequences."  Under the False Claims Act, the Government may collect three times the loss it incurred, plus a fine of $5,500 to $11,000 for each false bill submitted. 

 This settlement is the result of an investigation conducted by the Department of Health and Human Services – Office of the Inspector General (“HHS-OIG”); the Federal Bureau of Investigation; and the State of Indiana Attorney General’s Office Medicaid Fraud Control Unit in coordination with the United States Attorney's Office and the United States Department of Justice in Washington, D.C. 

Specifically, the United States alleges that since the late 1990s through October 2009, CHN had contracts with free-standing ambulatory surgery centers or “ASCs” not owned by CHN.  Through these contracts, the ASCs would provide out-patient surgical services to CHN patients.  CHN would then bill Medicare and Medicaid for the surgical services through the billing departments of its hospitals.  When CHN presented the bill to the Medicare and Medicaid contractors, however, the billing information represented that the surgery was performed in the out-patient department of one of CHN’s hospitals, rather than in an ASC.  Because the Medicare and Medicaid billing rates for surgeries performed in an ASC are generally lower than the billing rates for out-patient surgeries performed in a hospital, CHN received higher reimbursement from the Medicare and Medicaid programs than it was entitled.  According to the United States, medical providers were specifically placed on notice by the Centers for Medicare and Medicaid Services (“CMS”) in late November 2007 that services provided in an ASC should only be billed at ASC rates, but CHN continued this practice until October 1, 2009.

According to Assistant United States Attorney Shelese Woods, who handled the case for the United States, CHN has also agreed to enter into a Corporate Integrity Agreement with HHS-OIG.  “Our agency will continue to hold health care providers accountable for overbilling the Medicare and Medicaid programs,” said Special Agent in Charge Lamont Pugh III, U.S. Department of Health & Human Services, Office of Inspector General.  “Our Corporate Integrity Agreement with CHN requires board of directors oversight as well as compliance mechanisms that are designed to help ensure that CHN submits appropriate claims to federal health care programs moving forward.”

The claims resolved by this settlement are allegations only and there has been no determination of liability.  In investigating the case, HHS-OIG did not uncover any evidence of physical injury or harm to patients as a result of the alleged conduct.