Community Health Network to pay government $345M to settle Medicare fraud charges

INDIANAPOLIS (AP) — An Indianapolis-based health network has agreed to pay the government $345 million to resolve charges it defrauded Medicare by overpaying doctors who referred patients to its facilities, prosecutors said Tuesday.

The agreement settles allegations that senior management at Community Health Network recruited hundreds of doctors beginning in 2008 and paid them salaries that were significantly higher than what they received in their own private practices, the U.S. Department of Justice said.

Community Health submitted an unspecified number of claims to Medicare for services that resulted from the unlawful referrals, the department said. That violated a federal statute known as the Stark Law, which prohibits hospitals from billing for certain services referred by physicians with whom the hospital has a financial relationship unless the doctors’ compensation is consistent with fair market value and not based on the value or volume of their referrals to the hospital.

“The Stark Law was enacted to ensure that the clinical judgment of physicians is not corrupted by improper financial incentives,” Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division, said in a news release.

Community Health, in its own news release, called the allegations against it “technical violations.”

“This settlement, like those involving other health systems and hospitals, relates to the complex, highly regulated area of physician compensation,” spokesperson Kris Kirschner said.

The settlement resolves the government’s claims with no finding of wrongdoing, Community Health said.