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Alta Vista owner to pay $98 million

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The Associated Press

FRANKLIN, Tenn. — Community Health Systems Inc., Alta Vista Regional Hospital’s parent company, has agreed to pay $98 million to settle federal claims of improper billing by the hospital company.

The Justice Department and Community Health announced the settlement Monday. The government alleges that the company admitted patients to the hospital when it wasn’t medically necessary and then billed Medicare, Medicaid and the military’s Tricare program for those inpatient services. Community Health should have billed for less costly outpatient or observation cases, the government said

Franklin, Tenn.-based Community Health said there is no finding of improper conduct under the settlement and denied any wrongdoing.

Community Health said it previously set aside $102 million to cover the settlement and its related legal costs.

“The settlement agreement reflects the Company’s desire to end the investigation, which began in 2011, and to avoid the significant expense and distraction of litigation,” CHS said in a statement.

The settlement includes $9 million for similar alleged violations at Laredo Medical Center in Texas. It also cited improper billing of Medicare for services referred to the hospital by a doctor who was offered a director’s position there.
The government said that from 2005 through 2010, Community Health “engaged in a deliberate corporate-driven scheme” to boost hospital admissions of patients over 65 covered by Medicare, Medicaid and the Tricare program, who came into emergency rooms.

The settlement also resolved so-called “qui tam” lawsuits filed by several individuals under the False Claims Act, which allows private citizens to sue on the government’s behalf and to receive a portion of the money recovered from companies. The individuals who filed suits included physicians, nurses and supervisors at several Community Health hospitals.

Community Health Systems operates five other hospitals in New Mexico.

“Our organization is dedicated to high ethical standards as we strive to operate in a complex and ever changing regulatory environment,” CHS Chairman and Chief Executive Officer Wayne T. Smith said in a release. “The question of when a patient should be admitted to a hospital is, and always has been, a matter of medical judgment by the individual physician responsible for a patient’s care. Unfortunately, shifting and often ambiguous standards make it extremely difficult for physicians and hospitals to consistently comply with the regulations. We are committed to doing our best, despite these challenges.”

Editor’s note: The Optic’s Martín Salazar contributed to this report.