New information confirmed Wednesday shows two area hospitals were among 119 Community Health Systems facilities involved in a $98.15 million settlement to end a Department of Justice investigation.
CHS hospitals Wilkes-Barre General Hospital and Berwick Hospital Center were listed in the settlement ruling over the company’s billing practices.
The settlement, announced on Aug. 4 by the DOJ and CHS, resolves multiple lawsuits alleging the company knowingly billed government health care programs for inpatient services that should have been billed as outpatient or observation services.
“The government investigation and settlement agreement did include our affiliated hospitals in Wilkes-Barre and Berwick,” confirmed Tomi Galin, senior vice president of corporate communications and marketing at the CHS headquarters in Franklin, Tennessee. “Under the terms of the agreement, there was no finding of improper conduct by Community Health Systems or any of its affiliated hospitals.”
The for-profit CHS owns or leases 206 hospitals in 29 states. Those hospitals also include First Hospital in Kingston, and Regional Hospital and Moses Taylor Hospital, both in Scranton, which were not named in the settlement.
The other hospitals involved in the settlement were elsewhere in Pennsylvania, as well as in North Carolina, Texas, Tennessee, Indiana and Illinois.
Unionized nurses at Wilkes-Barre General have been working under the terms of a contract that expired last year and went on strike for five days last month. The expired contract was the first new contract between union workers and CHS, which bought the nonprofit Wyoming Valley Health Care System in May 2009.
According to the DOJ, the company allegedly engaged in a deliberate corporate-driven scheme to increase inpatient admissions of Medicare, Medicaid and TRICARE program beneficiaries over the age of 65 who originally arrived in emergency departments at the 119 CHS hospitals from 2005 through 2010.
The government alleged the inpatient admission of these beneficiaries was not medically necessary, and that the care needed by these beneficiaries should have been provided in a less costly outpatient or observation setting.
CHS previously established a $102 million reserve to cover settlements and related legal cost.
“Charging the government for higher cost inpatient services that patients do not need wastes the country’s health care resources,” stated Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division. “In addition, providing physicians with financial incentives to refer patients compromises medical judgment and risks depriving patients of the most appropriate health care available.”
CHS Chairman and Chief Executive Officer Wayne T. Smith said in a statement: “Our organization is dedicated to high ethical standards as we strive to operate in a complex and ever changing regulatory environment. 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.”
A DOJ news release dated Aug. 4 did not indicate any Northeastern Pennsylvania hospitals were involved. That release said the relevant cases were in North Carolina, Texas, Tennessee, Indiana and Illinois.