Hospital whistleblowers settle lawsuit for $725K

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A pair of whistle-blowing hospital administrators will receive $725,000 after settling a lawsuit filed against a former CEO who they allege forced them to pressure emergency room doctors to unnecessarily admit patients, their South Carolina-based attorney reports.

Gary Newsome, the former CEO of Health Management Associates of Naples, Florida, is paying a total of $3.64 million to settle the lawsuit brought by the U.S. Department of Justice and physicians and Jacqueline Meyer and Michael Cowling, who were administrators at hospitals HMA operated in North and South Carolina, said John Moylan of Wyche P.A. in Columbia who represented Meyer and Cowling.

The lawsuit, filed in 2011, alleged that HMA and EmCare, the company it contracted to provide doctors to its hospitals, concocted a scheme that resulted in millions of dollars in kickbacks. The company threatened to fire emergency room physicians unless they increased the number of inpatient admissions, even if the admissions weren’t warranted, the DOJ said.

HMA set mandatory company-wide admission rates of 15-20 percent for ER patients, and 50 percent for patients 65 and older, to bump revenue. Hospitals tend to get higher payments from Medicare for inpatient admissions as opposed to outpatient treatment, the DOJ said.

Meyer was the regional client administrator for 20 HMA-operated hospitals throughout the east coast. Cowling was the CEO of Heart of Lancaster Regional Medical Center in Lancaster, Pennsylvania and division vice president for HMA at regional medical centers in Mooresville, North Carolina, and Statesville, North Carolina. They claimed that they were forced to pressure doctors to admit the patients so the hospital could bill Medicaid, Moylan said.

“Management would say that they needed to increase admissions, and to tell the physicians to get on board,” he said. The physicians who did get on board would get kickbacks, according to the DOJ. Meyer ultimately left HMA, as did Cowling, who was terminated.

“He, like Jackie, received very adverse treatment,” Moylan said.

In all, HMA is paying $260 million to resolve the claims against it, and EmCare, of Dallas, Texas, is paying $29 million.

Barry Sabin of Latham & Watkins in Washington, D.C. who represented Newsome, said that his client emphatically denies the government’s allegations and was pleased to end the uncertainty and expense of protracted litigation.

Follow Bill Cresenzo on Twitter @bcresenzosclw

SETTLEMENT REPORT — WHISTLEBLOWER

Amount: $725,000

Injuries alleged: Retaliation

Case name: Meyer and Cowling v. HMA, Inc.

Case number:  1:14-cv-00586

Court: U.S. District Court for the District of Columbia

Date of settlement: April 19

Attorney for plaintiff: John Moylan of Wyche P.A. in Columbia

Attorney for defendant: Barry Sabin of Latham & Watkins in Washington, D.C.