Community Health Network pays $345 million to settle DOJ lawsuit over kickbacks
Community Health Network has agreed to pay the United States $345 million to resolve allegations that the system defrauded Medicare out of million of dollars in a illegal scheme that overpaid physicians in exchange for referring patients to its facilities.
These practices not only threaten patient outcomes with questionable referrals, but also increase healthcare costs by inflating doctor salaries, U.S. officials said Tuesday as they announced the settlement.
Patients typically trust that their doctor is referring them to other practices and doctors for the best health outcomes. In these cases, doctors made that decision, in part, based on receiving financial incentive from their employer, the Community Health Network, according to the lawsuit from the federal government.
“When doctors refer patients for CT scans, mammograms, or any other medical service, those patients should know the doctor is putting their medical interests first and not their profit margins,” said Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, in a statement.
Community Health Network denied any wrongdoing.
“This is completely unrelated to the quality and appropriateness of the care Community provided to patients,” said Community spokesperson Kris Kirschner in an emailed statement.
The settlement will be paid from a savings account, she said. The health system had an operating revenue of $3.1 billion in 2022.
The Indiana Hospital Association Tuesday came to the health system's defense, arguing the Department of Justice is misapplying the federal law the prohibits inappropriate referrals.
"Instead, without showing any unnecessary care or any harm to patients or Medicare, hospitals are frequently required to pay extraordinary damages to settle claims," said the association's legal expert Steven Pratt in an emailed statement.
The case was first opened when Community's then Chief Financial and Chief Operating Officer Thomas Fischer alerted federal law enforcement in 2014. The U.S. Department of Justice sued the Indianapolis-based health system in 2020.
The department's investigation, however, goes back to 2008 and 2009, when the health network began to recruit hundreds of doctors to refer patients to its facilities so they can bill for services, according to federal officials.
This isn't the first time Community Health Network has settled with the federal government over allegations of fraud. In 2015, the health system paid $20 million to settle allegations of questionable surgery bills.
Binghui Huang can be reached at 317-385-1595 or Bhuang@gannett.com
This article originally appeared on Indianapolis Star: Community Health Network pays $345M to settle DOJ lawsuit over kickbacks
