CHS agreed to pay $98.15 million to settle false claims allegations over its billing for inpatient admissions that should have been outpatient or observation services from 2005 through 2010, said DOJ, which intervened in the complaints.
119 hospitals were listed in the settlement and the alleged violations, originally lodged by whistleblowers, occurred before CHS owned the hospitals and are not part of the settlement. CHS says it’s working on a resolution to the cases.
“The government cares about short stays, and when it intervenes, settlements can be quite large,” says Witten, who mentioned the $26 million false claims settlement with Shands Healthcare in Florida (RMC 9/2/13, p. 1) and the $8 million settlement and deferred prosecution agreement with WakeMed Health and Hospitals in Raleigh, N.C. (RMC 12/24/12, p. 1).
CHS did not admit liability in the settlement.
According to a 200-page complaint filed against CHS by Doghramji, CHS, a for-profit chain, grew its business by acquiring hospitals in non-urban markets with little competition. For example, it added Triad Hospitals, Inc., with 50 facilities, in 2007. “Burdened by the considerable liabilities and debt associated with the constant acquisition of new hospitals, as well as a promise to investors that it would out-earn the market, CHS searched for nontraditional ways to increase its profits,” the complaint alleged. “As a result, CHS decided to offer beds to patients who did not meet criteria for medical necessity, increasing admission rates and profits.”
Data analysis by the whistleblowers allegedly shows a “pattern of aggressive admission practices for Medicare beneficiaries that enter CHS hospitals through the emergency room,” the complaint alleged. “ER admission rates at CHS hospitals are typically higher than would be expected, given the patient case mix and geographic status, indicating that many of these admissions are not medically necessary. These excessive ER admission patterns typically begin at hospitals after CHS acquires them and increase thereafter.”
Jeff Newman represents whistleblowers. He was not involved in this case.