Suits: How a Hospital Chain Schemed to Boost Profits

'NYT' looks at lawsuits against Health Management Associates
By Arden Dier,  Newser Staff
Posted Jan 24, 2014 9:41 AM CST
Suits: How a Hospital Chain Schemed to Boost Profits
The Charlotte Regional Medical Center, run by Health Management Associates.   (Wikipedia Commons)

The New York Times today takes a look at whistle-blower lawsuits claiming for-profit hospital chain Health Management Associates employed a strategy to up admission—whether or not patients needed care—in order to boost Medicare and Medicaid payments. The paper shares one tactic, in which ER scorecards were posted daily, showing doctors who met an admission target in green. Doctors who were close to the figure were in yellow, and failing doctors in red. That target? Admitting at least half of patients over 65 who visited the emergency room. In another case, a baby was admitted with a "fever" despite a normal temperature of 98.7 degrees.

When the CEO of an HMA-owned North Carolina hospital reported that his doctors wouldn't go along with the revenue-boosting policies, former HMA chief exec Gary Newsome—who made $22 million in three years—allegedly replied, "Do it anyway." Threats and financial incentives were also allegedly used, while execs who questioned the policies were often fired and reports on admission rates were burned, the Times adds. So far eight whistle-blower lawsuits have been filed against HMA in six states; last month, the Justice Department joined in, but one expert says typical penalties number in the 8-figure-range—pennies compared to the profits. She predicts it would take a settlement of at least $500 million to make an impact. To wit, the Times reports that when HMA revealed the DOJ was stepping into the lawsuits, its stock hardly moved. (More Health Management Associates stories.)

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