DOJ Files False Claims Act Complaint against Community Health Network

A whistleblower suit alleges that Community rewarded physician referrals with compensation way above fair market value.  

The Department of Justice has joined a whistleblower lawsuit leveling False Claims Act allegations against Community Health Network, Inc., accusing the Indianapolis-based health system of violating the Stark Law prohibitions against improper financial relationships with physician.

The DOJ alleges that Community employed physicians under terms that did not meet any Stark Law exception because the compensation was well above fair market value, and because Community paid bonuses to physicians who achieved a minimum target of referral revenues back to the hospital.

The complaint also alleges that Community received referrals from these physicians in violation of the Stark Law and submitted claims to Medicare knowing that the claims for those referred services were not eligible for payment. 

"Improper financial relationships between hospitals and physicians corrupt clinical decision-making, threaten patient care, and ultimately drive up Medicare costs," Assistant Attorney General Jody Hunt of DOJ's Civil Division said in a media release. 

Community issued a lengthy statement saying it is "committed to upholding the highest regulatory and ethical standards in all our business practices, including physician compensation."

"We have cooperated fully with the government's requests leading up to this point, and we are disappointed with their decision. We believe that it is a waste of the government's time and resources to pursue these meritless claims," the system said.

"This lawsuit involves certain administrative issues that are completely unrelated to patient care. We are confident that we have complied with the laws and regulations that govern the way we operate our health network. We are committed to fighting these allegations which have no merit."

"We are confident that we have complied with the law and regulations that govern the way we pay our physicians for the services they provide to our patients and to the communities we serve – services such as teaching, research, providing education to patients and developing protocols to enhance care delivery."

"Community recognizes that physician compensation is very complex and highly regulated. Our physician compensation practices are a key part of our overall compliance efforts. We are confident that we operate in a legally compliant manner. To ensure compliance, as is standard in the industry, Community uses a variety of resources including independent, third parties to evaluate physician compensation to ensure it is fair, as the law requires."