Franklin-based hospital company Community Health Systems will pay more than $98 million to settle a Department of Justice investigation into the company's billing practices.
Federal investigators had been looking into whether CHS (NYSE: CYH) billed Medicare, Medicaid and TRICARE for inpatient admissions, when, in the government's view, those services should have been billed as outpatient cases, which tend to be less expensive. The investigation covers the company practices in some facilities between January 2005 and December 2010.
As part of the settlement, all whistleblower cases filed in Illinois, Tennessee, North Carolina, Texas and Indiana will be dismissed, and those that were sealed will be unsealed.
There are conflicting reports on the full amount of the settlement. In an earlier statement, CHS said the settlment was for $88 million, while federal authorities said the total amount was $98 million. It's unclear at this point what caused that discrepancy.
The settlement agreement also stipulates that CHS take part in a five-year Corporate Integrity Agreement.
"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," said CEO Wayne Smith in a statement. "Unfortunately, shifting and often ambiguous standards make it extremely difficult for physicians and hospitals to consistently comply with the regulations. We are committed to doing our best, despite these challenges. Because this is an industry-wide issue, we hope the government will work to devise sound and reasonable rules for the important decision about whether to admit an individual for inpatient care, and we appreciate the opportunity to engage in meaningful dialogue with the government over these incredibly complicated issues."
The DOJ has stepped up enforcement actions in recent years, and is taking a closer look at the billing practices of several major health care providers.