New details emerge on HMA whistleblower suits

New details in a series of lawsuits allege the Naples, Fla.-based Health Management Associates (HMA) hospital chain used a combination of software, threats and monetary incentives to leverage higher Medicare and Medicaid payments and increase admissions, the New York Times reports.

The United States Department of Justice this month joined eight whistleblower suits filed against HMA in six states. The allegations go as high as former HMA CEO Gary D. Newsome, the driving force behind the strategy, according to some of the suits. For example, one lawsuit alleges HMA physicians kept scorecards that provided incentives for admitting the majority of patients over 65 who entered the emergency department, regardless of how much care they actually needed.

Despite the accusations against HMA, they are neither the beginning nor the end of such tactics, according to one of the plaintiff's attorneys. Rather, these practices have become the status quo for the healthcare industry, Janet Goldstein, a lawyer who represents a plaintiff in one suit, told the Times. "It's not a doctor in there watching those statistics--it's the finance people," she said. 

The accusations come at an inopportune time for HMA, which recently approved a $3.9 billion takeover by Community Health Systems, which will create the largest company (based on number of hospitals) in the nation.

The lawsuits, however, have done little to affect HMA stock, even after the DOJ announced its involvement, according to the Times. "Investors seem to think that DOJ investigations, qui tam suits and allegations of serious Medicare fraud are simply a cost of doing business," Sheryl R. Skolnick, who covers healthcare for CRT Capital, wrote in a letter to investors, the Times reported. As a rule, Skolnick said, any penalty under $500 million is seen as a slap on the wrist for corporations.

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