Two physician groups, EmCare Inc. (EmCare) and Physician’s Alliance Ltd (PAL), for allegedly receiving illegal remuneration in exchange for patient referrals to hospitals owned by the now-defunct Health Management Associates (HMA). EmCare provides physicians to hospitals to staff their Emergency Departments . Under the settlement with EmCare, the physician group will pay $29.6 million to resolve allegations that, from 2008 through 2012, EmCare received remuneration from HMA to recommend patients be admitted to HMA hospitals on an inpatient basis when the patients should have been treated on an outpatient basis. On average, Medicare pays at least three times as much for an inpatient admission as it does for outpatient care. As part of the alleged scheme, HMA made certain bonus payments to EmCare ED physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increased admissions of patients who came to the ED. In a separate settlement, PAL, headquartered in Lancaster, Pennsylvania, and three of its executives, Lee Meyers, Michael Warren, M.D. and Wallace Longton, M.D., agreed to resolve allegations that, from 2009 until 2012, PAL accepted illegal remuneration from HMA to refer patients to two HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center. Under the settlement, PAL and its executives will pay $4 million plus a percentage of proceeds from the sale of PAL’s interest in a joint venture with HMA.
Envision Healthcare Corporation (Envision) has also entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General as part of the resolution of the EmCare matter. EmCare is a subsidiary of Envision. Under the qui tam, or whistleblower, provisions of the False Claims Act, private individuals may sue on behalf of the government for false claims and share in any recovery. The EmCare settlement resolves a qui tam lawsuit filed by Drs. Thomas Mason and Stephen Folstad, whose medical practice, MEMA, previously supplied ED physicians to two HMA hospitals in North Carolina. In connection with the settlement, Drs. Mason and Folstad will receive $6,222,907.
The settlements were the result of a coordinated effort by the Civil Division of the Department of Justice and, in the EmCare matter, the United States Attorney’s Office for the Western District of North Carolina, and in the PAL matter, the United States Attorney’s Office for the Eastern District of Pennsylvania. The investigations were conducted by the Office of Inspector General of the United States Department of Health and Human Services and the Federal Bureau of Investigation.