Former Health Management Associates CEO Gary Newsome has emerged as a defendant in a broad whistle-blower investigation alleging the Naples-based hospital system engaged in kickbacks to boost patient admissions, regardless of medical necessity.
In a news release Monday, the Department of Justice alleges Newsome directed corporate officers to exert “significant pressure” on emergency physicians and hospital administrators.
“The Department of Justice is committed to ensuring that health care providers who attempt to misuse federal health care programs for their own profit are held accountable,” said Stuart F. Delery, assistant attorney general for the Justice Department’s civil division, in a statement. “Schemes such as this one can contribute significantly to the rising cost of delivering health care and create needless patient risk.”
Newsome stepped down from his post in July to serve as as president of The Church of Jesus Christ of Latter-day Saints’ Uruguay-Montevideo Mission in South America.
HMA did not immediately respond to the government’s Monday afternoon announcement.
The company operates 71 hospitals in 15 states, including Lehigh Regional Medical Center, two Physicians Regional Medical Center hospitals in Naples and two health centers in Charlotte County.
The Justice Department has joined eight related lawsuits in recent months. It also accuses HMA of inflating billing claims to Medicare and Medicaid and paying other physician groups for referrals.
The Florida case accused the company of providing up to $800,000 worth of office space, equipment and other payments to Primary Care Associates of North Port in exchange for patient referrals to its hospitals. According to the suit, Primary Care Associates referrals accounted for one-third of revenues for both HMA hospitals in Charlotte County between 2004 and mid-2007, or more than $48 million.
HMA shareholders last week overwhelmingly voted to approve a $7.6 billion deal that would turn the company over to Tennessee-based Community Health Systems.