Federal prosecutors announced yesterday that Community Health Network has agreed to pay $20.3 million to settle allegations that the health care provider had for years submitted false claims for Medicare and Medicaid reimbursement. Community Health operates seven hospitals in Indianapolis and has dozens of other medical facilities scattered throughout Central Indiana.
According to Assistant U.S. Attorney Shelese Woods, the settlement is related to contracts that Community Health had previously entered into with local ambulatory surgery centers not owned by the provider. The cost of performing surgeries at these centers was allegedly cheaper than the cost of performing the same surgeries at a Community Health hospital. The difference in price for the procedures could range from small (around $200) to quite substantial ($2,000).
The government contends that Community Health doctors would refer patients to surgery centers in an effort to cut costs. At the same time, Community Health allegedly submitted bills to Medicare and Medicaid claiming the surgeries had been performed at a Community Health hospital when, in fact, they were performed at the cheaper surgery centers. These alleged false claims resulted in the government overpaying for the surgeries.
Woods told the media that she believes Community Health had actually been engaging in the fraud laid out in the allegations since the late 1990s, but the statute of limitations on health care fraud prevented the allegations from going back that far. Community Health purportedly stopped submitting bills in this manner in 2009. According to the Indianapolis Star, the provider no longer has contracts with surgery centers.
The government notified hospitals back in November of 2007 that submitting reimbursement bills to Medicare for outside procedures and falsely claiming they were done in-house was not allowed. According to Woods, the damages from Community Health’s alleged scheme after this notice had been sent out totaled $9.35 million.