Four years ago, Goldberg, Kohn Ltd. filed a federal court claim that alleged Medicare fraud by Community Health Systems.
On Monday, that claim and others like it yielded a multimillion-dollar settlement that may be one of the largest by a hospital chain in the last half-decade.
The U.S. Department of Justice announced that the national health-care provider would pay more than $97 million to settle several lawsuits after a multi-year investigation into its billing practices.
The hospital group was accused of systematically admitting Medicare recipients as inpatients, a designation that allowed the company to bill the government at a higher rate when it wasn’t necessary.
Matthew K. Organ, a principal in Goldberg, Kohn’s litigation and labor and employment groups who worked on the case, said the billing rate for inpatients could be up to 10 times as high as those for patients who were given observational or outpatient status.
“The most common ailments CHS took advantage of were soft diagnoses, like mild chest pain, which is often just indigestion,” Organ said today.
“Someone would come in and say ‘Hey, I fainted,’ when that’s a low blood sugar issue, and they would work it up in some way to make sure that this patient (was an inpatient) when, in fact, they really should’ve been given a cold towel and sent home.”
Community Health Systems has nine hospitals in Illinois — two in Waukegan and one each in Blue Island, Galesburg, Granite City, Mount Vernon, Red Bud, Marion and Anna.
Nationally, the company is accused of conducting the same practices under Medicaid and TriCare, the military version of Medicare.
In a series of seven suits that were unsealed in federal courts across the country, a group of whistleblowers also alleged the company set quotas for taking in such patients and punished doctors and employees who did not comply.
The Justice Department, which joined as a plaintiff in the suits, described the company’s tactics as “a deliberate corporate-driven scheme” that spanned 119 of its hospitals.
In a statement, the health group’s chairman and CEO Wayne T. Smith defended the company by saying federal guidelines on admission practices are unclear.
“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,” he said. “Unfortunately, shifting and often ambiguous standards make it extremely difficult for physicians and hospitals to consistently comply with the regulations.”
The cases were brought under the federal False Claims Act, which allows the government to sign on to whistleblower claims and gives an incentive for citizens to report fraud by allowing them to take a portion — between 15 and 25 percent in a case like this, Organ said — of the funds recovered.
There has not yet been an agreement on how much the individual plaintiffs will be given.
Goldberg, Kohn is known for its False Claims Act work, having obtained a $334 million judgment against health-care operator Amerigroup in 2006 that remains the largest jury award in the act’s history.
Amerigroup appealed that judgment and ultimately agreed to pay $225 million — $144 million of which was divvied up between the U.S. government and the state of Illinois — in 2008.
Organ said the relative size of the Community Health Systems settlement is difficult to gauge, but said that it’s “one of the largest hospital chain settlements in the last five years, maybe longer.”
The suit filed by Goldberg, Kohn in federal court in Chicago is United States ex rel. Plantz v. CHS, et al., No. 10 C 0959 (N.D. Ill.).