Community Health Systems 2015 Annual Report Download - page 67

Certain Legal Proceedings Related to HMA
Medicare/Medicaid Billing Lawsuits
On January 11, 2010, HMA and one of its subsidiaries were named in a qui tam lawsuit entitled U.S. ex rel.
J. Michael Mastej v. Health Management Associates, Inc. et al. in the United States District Court for the Middle
District of Florida, Tampa Division. The plaintiff’s complaint alleged that, among other things, the defendants
erroneously submitted claims to Medicare and that those claims were falsely certified to be in compliance with
Section 1877 of the Social Security Act of 1935 (commonly known as the “Stark law”) and the Anti-Kickback
Statute. The plaintiff’s complaint further alleged that the defendants’ conduct violated the False Claims Act. The
plaintiff seeks recovery of all Medicare and Medicaid reimbursement that the defendants received as a result of
the alleged false certifications and treble damages under the False Claims Act, as well as a civil penalty for each
Medicare and Medicaid claim supported by such alleged false certifications. On August 18, 2010, the plaintiff
filed a first amended complaint that was similar to the original complaint. On February 23, 2011, the case was
transferred to the United States District Court for the Middle District of Florida, Fort Myers Division. On May 5,
2011, the plaintiff filed a second amended complaint, which was similar to the first amended complaint. On
May 17, 2011, the defendants moved to dismiss the second amended complaint for failure to state a claim with
the particularity required and failure to state a claim upon which relief can be granted. On January 26, 2012, the
United States gave notice of its decision not to intervene in this lawsuit. On February 16, 2012, the court granted
the defendants’ motion to dismiss, without prejudice. The court’s order permitted the plaintiff to file an amended
complaint. On March 8, 2012, the plaintiff filed a third amended complaint, which was similar to the first
amended complaint and the second amended complaint. On March 26, 2012, the defendants moved to dismiss the
third amended complaint on the same bases set forth in earlier motions to dismiss. On March 19, 2013, the
United States District Court for the Middle District of Florida, Tampa Division, dismissed the third amended
complaint with prejudice. On March 28, 2013, the United States of America filed a motion to clarify that the
dismissal with prejudice did not relate to the United States. On April 4, 2013, the defendants filed an opposition
to the United States’ motion for clarification. The Government’s motion remains pending at this time. The case
was appealed by Mastej to the Eleventh Circuit Court of Appeals and on October 30, 2014 the appellate court
affirmed the dismissal of part of the case and reversed the dismissal of part of the case. The relator sought further
relief from the United States Supreme Court, which was denied on June 1, 2015. The case has been remanded to
the district court and has been set for trial during the November 1, 2016 trial term. We intend to vigorously
defend HMA and its subsidiary against the allegations in this matter.
Beginning during the week of December 16, 2013 eleven qui tam lawsuits filed by private individuals
against HMA were unsealed in various United States district courts. The United States has elected to intervene in
all or part of eight of these matters; namely U.S. ex rel. Craig Brummer v. Health Management Associates, Inc. et
al. (Middle District Georgia) (“Brummer”); U.S. ex rel. Ralph D. Williams v. Health Management Associates,
Inc. et al. (Middle District Georgia) (“Williams”); U.S. ex rel. Scott H. Plantz, M.D. et al. v. Health Management
Associates, Inc., et al. (Northern District Illinois) (“Plantz”); U.S. ex rel. Thomas L. Mason, M.D. et al. v. Health
Management Associates, Inc. et al. (Western District North Carolina) (“Mason”); U.S. ex rel. Jacqueline Meyer,
et al. v. Health Management Associates, Inc., Gary Newsome et al. (“Jacqueline Meyer”) (District of South
Carolina); U.S. ex rel. George Miller, et al. v. Health Management Associates, Inc. (Eastern District of
Pennsylvania) (“Miller”); U.S. ex rel. Bradley Nurkin v. Health Management Associates, Inc. et al. (Middle
District of Florida) (“Nurkin”); and U.S. ex rel. Paul Meyer v. Health Management Associates, Inc. et al.
(Southern District Florida) (“Paul Meyer”). The United States has elected to intervene with respect to
allegations in these cases that certain HMA hospitals inappropriately admitted patients and then submitted
reimbursement claims for treating those individuals to federal healthcare programs in violation of the False
Claims Act or that certain HMA hospitals had inappropriate financial relationships with physicians which
violated the Stark law, the Anti-Kickback Statute, and the False Claims Act. Certain of these complaints also
allege the same actions violated various state laws which prohibit false claims. The United States has declined to
intervene in three of the eleven matters, namely U.S. ex rel. Anita France, et al. v. Health Management
Associates, Inc. (Middle District Florida) (“France”) which involved allegations of wrongful billing and was
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