HMA And EmCare Face A One-Two Punch In National Whistleblower Lawsuit By Large ER Physician Group

On December 30, 2013, the United States District Court for the Western District of North Carolina, in response to a Department of Justice motion, unsealed a whistleblower lawsuit filed by North Carolina Emergency Room Physicians against Health Management Associates and Emergency Medical Services Corporation (“EmCare”). The “qui tam” whistleblower lawsuit was filed in Charlotte, North Carolina in 2010 by Thomas L. Mason, M.D., Steven G. Folstad, M.D. and Mid-Atlantic Emergency Medical Associates, PA (“MEMA”), a large physician-owned practice providing high quality emergency and acute medical care throughout greater Charlotte and the Piedmont area of North Carolina. MEMA had held the ER physician services contracts at two HMA hospitals in North Carolina for more than a decade.

The lawsuit alleges that HMA and Emcare cheated the Medicare and Medicaid Programs in its hospitals across the United States by: admitting ER patients to HMA when it wasn’t medically necessary; paying ER physicians kickbacks to incentivize them to order expensive ED services and to admit ER patients to HMA hospitals when it was not medically necessary or appropriate; and subjecting ER patients to expensive ED services. including unnecessary and inappropriate diagnostic tests. The lawsuit alleges that EMCARE conspired with HMA to perpetuate the fraudulent scheme to submit claims for unnecessary tests and admissions, accepted kickbacks from HMA to recommend or refer patients to HMA facilities; and agreed to further HMA’s fraud related to unnecessary emergency room care and hospital admissions in order to retain and secure ED contracts.

The qui tam lawsuit alleges that when HMA and EMCARE defrauded the Medicare and Medicaid Programs, whistleblowers Mason, Folstad, and MEMA stood up for patients in the face of HMA’s and EmCare’s profit-centered corporate control over the Emergency Department and exposed this significant fraud. HMA tried to silence the Whistleblowers (Drs. Mason and Folstad and other MEMA physicians). When they could not, HMA attempted to entice the Plaintiffs at both North Carolina hospitals with illegal cash inducements to meet corporate mandates to order unnecessary tests and to recommend that ED patients be admitted to the hospital unnecessarily. The Whistleblowers refused HMA’s cash offer. HMA leaders responded with escalating retributions against the Whistleblowers, eventually terminating without cause the Relators’ contracts to staff two ERs. After illegally terminating MEMA, HMA awarded exclusive contracts for the Lake Norman emergency room and hospitalists services to EMCARE — as a financial inducement to refer patients to HMA for lucrative hospital services.

The United States has partially intervened in the Relators’ allegations, namely, that HMA submitted false claims for ER patients who were admitted, but who should have been in observation or treated and discharged. The United States has also elected to intervene in the Relators’ allegations that HMA submitted false claims related to violations of the Anti-Kickback statute resulting from incentives paid by HMA to Emergency Department physicians or physicians groups for improving metrics and benchmarks related to inpatient admissions. The United States and a number of states have requested a 90-day extension to determine if they will intervene in the Relators’ allegations against EMCARE. The matter is being investigated by the United States Department of Justice, the United States Attorney’s Office for the Western District of North Carolina, the United States
Department of Health & Human Services – Office of the Inspector General (HHS-OIG), and the Federal Bureau of Investigation (FBI).

“This is a massive, nationwide fraud on the American taxpayers, that subjected patients to unnecessary tests and hospital admissions,” said lead counsel in the case, Marc S. Raspanti, of the Philadelphia law firm of Pietragallo Gordon Alfano Bosick & Raspanti, LLP. “Dr. Mason, Dr. Folstad, and MEMA have exhibited tremendous personal and professional courage in repeatedly standing up to HMA’s improper pressures.” Pamela C. Brecht, an attorney with Pietragallo Gordon Alfano Bosick & Raspanti, LLP, who has worked tirelessly for years, investigating and pursuing the fraud allegations in this case, added: “The fraudulent conduct, and callous disregard for the medical needs of vulnerable patients, particularly the elderly and children, that HMA and EMCARE exhibited is eye opening.”

Pietragallo Gordon Alfano Bosick & Raspanti, LLP, are pursuing this case with co-counsel, James F. Wyatt, III and Robert Blake of the Charlotte, North Carolina law firm of Wyatt & Blake, LLP, on behalf of the American taxpayers. The lawsuit is captioned United States et. al. ex rel. Mason, Folstad and MEMA v. Health Management Associates, Inc., et. al., No. 3:10CV472 (W.D. NC-Charlotte). A copy of the unsealed complaint can be found at www.FalseClaimsAct.com.