HMA accused of scheme to increase admissions
Some of the lawsuits against Health Management Associates (HMA), a for-profit hospital chain based in Naples, FL, concern allegations that it encouraged doctors to admit patients who did not need inpatient care, as a way of increasing reimbursement revenue.
In a recent court hearing, prosecutors revealed the allegations made by HMA whistleblowers. One of the lawsuits claims that HMA has a formal strategy for increasing revenue that included posting scorecards for physician admissions. The goal was to admit at least half of the patients over 65 years old who entered the emergency department. Scorecards for physicians who hit that mark were color-coded green, those who were close to the goal were yellow, and underperformers were red, according to the lawsuit.
HMA declined to comment on pending litigation other than to say it was cooperating with the Justice Department investigation. "HMA associates and physicians who practice at our facilities are focused on providing the highest-quality patient care in all of our hospitals," according to a company statement.
The lawsuits point to the company’s former chief executive, Gary D. Newsome, as the one responsible for the strategy to increase admissions and revenue. Newsome’s attorney issued a statement denying the allegations. Newsome joined HMA in September 2008 and soon after traveled to North Carolina to meet with local hospital officials, several of the lawsuits allege. At that meeting he explained that he was instituting new protocols and customized software that would increase admissions at HMA hospitals, according to a federal suit filed by Michael Cowling, a former division vice president and chief executive of an HMA-owned hospital in Mooresville, NC.
Cowling alleges that administrators were directed to use the customized software program to monitor the daily percentage of patients being admitted and then post the physicians’ scorecards.
Cowling claims that he reported to Newsome physician concerns that the new protocols were clinically inappropriate and would result in unnecessary tests and admissions. The lawsuit claims that Cowling said the doctors would not participate, but Newsome responded by saying, "Do it anyway."
A lawsuit by Craig Brummer, MD, a former medical director of emergency departments at two HMA hospitals, includes examples of how the system prompted physicians to admit patients who did not need inpatient care, including an infant who was admitted for fever when the record shows the temperature at admission as 98.7 degrees.
Some of the lawsuits claim that executives who questioned or resisted the HMA policies were fired. Jacqueline Meyer, a regional administrator for EmCare, a company that provided emergency department physicians to several HMA hospitals, claims that she was fired after refusing to follow HMA’s directives and fire doctors who admitted fewer patients than HMA wanted.
Court filings indicate that Ralph D. Williams, an accountant with 30 years’ experience in hospital management, became concerned after he was hired as the chief financial officer for an HMA hospital in Monroe, GA. Williams asked an outside consulting firm to review the hospital’s increased inpatient admission rate, according to his lawsuit. Williams says he presented the critical report to a division executive, who told him to burn it. Williams was fired soon after and filed a qui tam lawsuit against HMA.
In addition to the lawsuits, a former vice president with HMA has been indicted on a charge of falsifying records to impede one of the federal investigations into HMA’s billing practices. If convicted, Joshua S. Putter faces a maximum penalty of 20 years in federal prison.
According to the indictment, on or about Oct. 7, 2008, Putter knowingly falsified, or made false entry in a document, with the intent to impede, obstruct, or influence an investigation.