Community Health Network Complaint Filed by the United States Under False Claims Act

The United States has filed a complaint against Community Health Network Inc. (Community) in the U.S. District Court for the Southern District of Indiana, the Department of Justice announced today.  Community, an integrated health care system in central Indiana, is alleged to have violated the Stark Law and thereby submitted false claims to the Medicare program.  

The Stark Law prohibits a hospital from billing Medicare for services referred by a physician with whom the hospital has an improper financial relationship that does not meet any statutory or regulatory exception.  The government’s complaint alleges that Community had employment relationships with a number of physicians that did not meet any Stark Law exception because the compensation Community paid to the physicians was well above fair market value and because Community conditioned paying bonuses on physicians achieving a minimum target of referral revenues to the hospital.  The complaint alleges that Community received referrals from these physicians in violation of the Stark Law and submitted claims to Medicare knowing that the claims for those referred services were not eligible for payment. 

“Improper financial relationships between hospitals and physicians corrupt clinical decision-making, threaten patient care, and ultimately drive up Medicare costs,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “We are committed to eliminating these improper inducements and thereby ensuring the Medicare program remains fiscally sound to serve our nation’s senior citizens.”

“Our goal at the U.S. Attorney’s Office is to serve the citizens and help ensure safety in their communities,” said U.S. Attorney Josh Minkler for the Southern District of Indiana.  “Hospitals are responsible for not only the health and well-being of their patients, but are also required to establish a compliance program in order to protect against improper payments, fraud and abuse as a condition of enrollment in the Medicare program.” 

The United States filed its complaint in a lawsuit originally filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private parties to file suit on behalf of the United States for false claims and to receive a share of any recovery.  The Act permits the United States to intervene and take over the lawsuit, as it has done here in part.  Those who violate the Act are subject to treble damages and applicable penalties.

The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services (HHS), at 800-HHS-TIPS (800-447-8477).

This case is being handled by the Justice Department’s Civil Division and the United States Attorney’s Office for the Southern District of Indiana, with assistance from the Office of Inspector General of the Department of Health and Human Services.  The case is captioned United States and the State of Indiana ex rel. Thomas Fischer v. Community Health Network, Inc., et al. No. 1:14-cv-1215 (RLY-DKL) (S.D. Ind.).

The claims in which the United States has intervened are allegations only, and there has been no determination of liability.