Former CEO of Hospital Chain to Pay $3.46 Million to Resolve False Billing and Kickback Allegations

Gary D. Newsome, former CEO of Health Management Associates LLC (HMA),  a hospital chain that was headquartered in Naples, Florida, has agreed to pay the United States $3.46 million to settle allegations that he caused HMA to knowingly submit false claims to government health care programs by admitting patients who could have been treated on a less costly, outpatient basis, the Department of Justice announced. The settlement also resolves allegations that Newsome caused HMA to pay remuneration to Emergency Department (ED) physicians in return for referrals.  

“Those who bill federal health care programs for unnecessary hospital stays will be held accountable for wasting federal dollars,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Patients deserve the unfettered, independent judgment of their health care professionals. We will pursue those who cause hospitals to offer financial incentives to physicians in return for improper patient referrals that undermine the integrity of our health care system.”

“A physician’s health care decisions should be driven by what is in the patient’s best interest, not by what helps line a provider’s pockets,” said Barbara Bowens, the Acting U.S. Attorney for South Carolina for purposes of this case. “The U.S. Attorney’s Office will not tolerate false claims based on unnecessary hospital admissions, which drive up health care costs and can harm patients.”

“Providers are expected to closely follow rules and bill properly. Further, in this case, the government contended that Newsome directed illegal payments for referrals,” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Services. “Taxpayer money wasted is money stolen from vital government health programs.”

Read the entire press release from the Department of Justice by clicking here.