Judge dismisses lawsuit accusing CHS of making EHR false claims

A federal judge has dismissed a lawsuit against Franklin, Tenn.-based Community Health Systems alleging the company submitted hundreds of millions of dollars in false claims to HHS. 

The allegedly false claims were related to CHS' adoption of EHR technology and adherence to the meaningful use program, now called the promoting interoperability program. Through the program, CMS distributed incentive payments to eligible providers for installing EHR systems and using them to engage patients and improve care coordination. 

Two former CHS employees sued the for-profit hospital chain and its EHR vendor Medhost in 2018. After the federal government declined to intervene in the case, the court unsealed the lawsuit and the whistleblowers filed an amended complaint. The lawsuit alleged CHS and Medhost violated the False Claims Act by falsely attesting that EHR software used by CHS hospitals and developed by Medhost complied with requirements of the promoting interoperability program. The lawsuit claimed CHS received more than $450 million in incentive payments between 2012 and 2015. 

CHS, individual hospitals named as defendants and Medhost filed four motions to dismiss the amended complaint. They argued the complaint fails to state a claim upon which relief may be granted and fails to comply with the heightened pleading requirements for alleging fraud. 

In a 38-page decision issued June 11, a Florida federal judge dismissed the lawsuit with prejudice. 

"While the relators have indeed poured forth heaps of alleged facts, interwoven with conclusory allegations of wrongdoing, the resulting complaint is nonetheless fatally flawed," U.S. District Judge Robert N. Scola Jr. wrote in the decision. "This is because, even when construing the universe of facts presented in light most favorable to the relators, the court is unable to reasonably infer that the defendants have engaged in the alleged misconduct." 

Regarding the decision to dismiss the case with prejudice, Mr. Scola wrote that the relators' request for leave to amend their complaint lacks merit. "They have failed to cite any legal authority or factual support that would justify amendment," he wrote in the decision. 

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