HMA, Ex-CEO Gary Newsome Accused of False Claims, Pressuring ER Physicians to Increase Admissions

Naples, Fla.-based Health Management Associates has been named in another complaint alleging false claims, but this lawsuit also names Gary Newsome, former Health Management president and CEO, as a defendant for being personally involved in the scheme.

The qui tam suit was initiated by Jacqueline Meyer, former regional client administrator for EmCare, and Michael Cowling, former Health Management division vice president and CEO of Health Management-owned Lake Norman Regional Medical Center in Mooresville, N.C. The plaintiffs brought the action on behalf of the United States under the False Claims Act, as well as on behalf of Florida, Georgia, North Carolina, Oklahoma, Tennesse and Texas and their respective qui tam provisions. The complaint, unsealed Jan. 6, was filed in the U.S. District Court for the district of South Carolina and joined by the U.S. Department of Justice.

The suit claims Health Management, EmCare — one of Health Management's emergency room physician contractors — and Mr. Newsome were allegedly involved in pressuring emergency room physicians in several hospitals to increase admissions in order to bill federal insurance programs hundreds of millions of dollars for unnecessary procedures, diagnostic tests and admissions.

According to the complaint, Health Management executives, including Mr. Newsome, allegedly created "corporate benchmark" rates for emergency room admissions which "were not based on an assessment of the medical needs of the patient mix at particular hospitals…. Rather, the benchmarks were designed solely to boost hospital admission rates, irrespective of the medical needs of the patient population."

The alleged corporate benchmark for emergency room admission rates was between 16 percent and 20 percent, while the national average for emergency room admission rates in 2008 was 9.79 percent, according to the complaint.

Health Management executives allegedly implemented physician tracking systems to monitor admission rates for each physician, labeling their activity with green, yellow or red labels, indicating if they had met Health Management's admission benchmark, were close to the benchmark or failed to meet the benchmark, respectively.

According to the complaint, "non-medical" hospital administrators, including CEOs, were allegedly required to conduct daily reviews with emergency room physicians to "interrogate" them about "missed" admissions.

Health Management executives also allegedly offered monetary bonuses to emergency room physicians who exceeded the corporate benchmarks.

Additionally, EmCare allegedly "repeatedly terminated physicians and ER medical directors who insisted on basing admission decisions and diagnostic testing solely on the medical needs of their patients." The complaint claims Ms. Meyer was removed from overseeing Health Management's ER practices after allegedly refusing to fire physicians and medical directors who admitted fewer patients than the corporate benchmark required. Ms. Meyer was later fired for allegedly refusing to "get with the program" after writing to Health Management's compliance department regarding Health Management and EmCare's behavior, according to the complaint.

Mr. Cowling was also allegedly fired after refusing to direct emergency room physicians at his hospital to base admission decisions on Health Management's protocol.

The suit also accuses HMA, EmCare and Mr. Newsome of violating the False Claims Act Anti-Retaliation Provision for their termination of Ms. Meyer and seeks appropriate damages.

More Articles on Health Management Associates:

HMA Allegedly Paid Millions of Dollars in Kickbacks to More Than 100 Physicians
Former ED Directors Claim HMA Offered Kickbacks to Admit Medicare Patients
Whistleblower Suit Against HMA Alleges Payments for Physician Referrals

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