DOJ announces $33 million settlement with two physician groups

by Ben Vernia | December 26th, 2017

On December 19, the Department of Justice announced settlements with two physician groups, totaling over $33 million. According to DOJ’s press release:

The Justice Department today announced settlements with two physician groups, EmCare Inc. (EmCare) and Physician’s Alliance Ltd (PAL), for allegedly receiving illegal remuneration in exchange for patient referrals to hospitals owned by the now-defunct Health Management Associates (HMA).

Dallas-based EmCare provides physicians to hospitals to staff their Emergency Departments (EDs).  Under the settlement with EmCare, the physician group will pay $29.6 million to resolve allegations that, from 2008 through 2012, EmCare received remuneration from HMA to recommend patients be admitted to HMA hospitals on an inpatient basis when the patients should have been treated on an outpatient basis.  On average, Medicare pays at least three times as much for an inpatient admission as it does for outpatient care.  As part of the alleged scheme, HMA made certain bonus payments to EmCare ED physicians and tied EmCare’s retention of existing contracts and receipt of new contracts to increased admissions of patients who came to the ED.

In a separate settlement, PAL, headquartered in Lancaster, Pennsylvania, and three of its executives, Lee Meyers, Michael Warren, M.D. and Wallace Longton, M.D., agreed to resolve allegations that, from 2009 until 2012, PAL accepted illegal remuneration from HMA to refer patients to two HMA hospitals, Lancaster Regional Medical Center and Heart of Lancaster Medical Center.  Under the settlement, PAL and its executives will pay $4 million plus a percentage of proceeds from the sale of PAL’s interest in a joint venture with HMA.

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Envision Healthcare Corporation (Envision) has also entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General as part of the resolution of the EmCare matter.  EmCare is a subsidiary of Envision.

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According to the DOJ, the whistleblowers – two physicians – will receive approximately $6.2 million (an 18.5% relators’ share).

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