Quorum settles fraud cases for $95.5 million

Company says enough is enough

Quorum Health Group in Brentwood, TN, announced recently that it has reached understandings with the Department of Justice to recommend agreements to settle two qui tam lawsuits.

One case involves Medicare cost reports and a second primarily involves allocation of costs at Flowers Hospital in Dothan, AL, to its home health services agency.

"The management and board of directors of Quorum continue to believe that at all times the company and its employees have operated in a proper and ethical manner," James Dalton Jr., president and CEO of Quorum, said in announcing the settlement. "Nevertheless, we considered the amount of money and time the company has already expended in these matters and the additional resources needed to take the cases to conclusions in court and decided these agreements make business sense."

The agreements are subject to the negotiation of terms of settlement agreements and corporate integrity agreements. The tentative agreements call for the company to compensate the government approximately $95.5 million, with interest accruing at 7.25% until resolution of final agreements.

The Medicare cost report settlement amount is approximately $77.5 million. The parties have agreed the settlement documents in the cost report case will be completed within four months. Quorum reports that the home health services settlement of approximately $18 million probably will be paid by the end of this calendar year.

An investigation at Flowers Hospital by the company uncovered alleged improper activities on the part of an employee, who was then fired. The company claims that it reported its findings immediately to the proper authorities. The qui tam suit involving home health issues was later filed by the former employee.

The company claims that it cooperated fully with the government in its investigation of the case.

Quorum Health Group Inc. owns and operates acute care hospitals nationwide through its affiliates. Quorum Health Resources LLC, a subsidiary, the nation’s largest manager of not-for-profit hospitals, provides consulting services to hospitals.