DOJ Joins Lawsuit Against One Of The Nation's Largest Hospital Operators

One of the country's largest hospital operators now faces a major lawsuit claiming the company defrauded the federal government of millions of dollars by engaging in Medicare and Medicaid fraud over a period of years. The qui tam action brought under the False Claims Act accuses Health Management Associates, its CEO, Gary Newsome, and EmCare of working to defraud the government of millions of dollars over a span of at least four years.

Qui tam lawsuits exist so that individuals can sue private people and companies for fraud. The lawsuits are technically brought by individuals, but are actually on behalf of the government. Those who bring the lawsuits are rewarded for their actions in the end with a share of the overall judgment in successful cases.

In the current case, the original suit against HMA was brought by Michael Cowling, a former vice-president at the company and CEO of several company hospitals. Cowling and Jacqueline Meyer, an administrator at EmCare (a company that provides physician services for emergency rooms), say HMA routinely pressured doctors into unnecessarily admitting patients into the hospital in an attempt to extract money by filing for additional Medicare and Medicaid reimbursements.

According to the whistleblower lawsuit, HMA worked in conjunction with the "equally corrupt" EmCare to set unrealistically high ER-to-hospital admission targets. Those ER doctors who met the high targets were rewarded with bonuses while those who did not were frequently fired or demoted. The same punishments were handed down to hospital CEOs and medical directors who presided over hospitals that did not meet their targets.

The lawsuit alleges that Newsome not only was aware of the practice, but that he personally oversaw its implementation. Though Cowling and Meyer brought the case on their own, the Justice Department decided to join the lawsuit, an important show of faith in the claim.

Remarkably, the Department of Justice says that this is the eighth case in only the past month that they have joined against HMA. Though HMA is currently at the receiving end of a flurry of whistleblower lawsuits, the Cowling case is the only one that specifically names Newsome for his role in the scheme.

Disturbingly, public records show that while HMA was accused of defrauding the federal government of millions, Newsome took home nearly $22 million in compensation between 2010 and 2012. The next year, when news of the fraud lawsuits became public, HMA revealed that Newsome would be retiring to lead a Mormon mission to South America.

The hope is that the qui tam lawsuit is ultimately successful and that HMA and Newsome are not allowed to get away with the fraud they attempted to perpetrate.


Justice Department Joins Rare Lawsuit against Hospital CEO for Defrauding Medicare and Medicaid, by Matt Bewig, published at on January 5, 2014.

Government Intervenes in Lawsuits Against Health Management Associates, published at on January 13, 2014.

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