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Grant & Eisenhofer Represents Whistleblowers in Nearly $100 Million Settlement With Community Health Systems, Resolving Claims that Medicare/Medicaid Payors Were Bilked by Excessive ER Admissions

Justice Department and multi-state AG settlement resolves alleged scheme of over-admitting patients at nearly 120 CHS hospitals across 20 states; whistleblowers include former ER physician in Philadelphia

WASHINGTON, Aug. 4, 2014 /PRNewswire/ -- In a major settlement for alleged health care fraud, law firm Grant & Eisenhofer P.A., working with the U.S. Justice Department and various states' attorneys general, has reached an agreement with Community Health Systems (NYSE: CYH) to resolve whistleblower lawsuits filed under federal and state false claims acts. The Franklin, Tenn.-based company, one of the nation's largest for-profit hospital chains, will pay over $97 Million to settle allegations that federal and state insurance plans were bilked by over-admissions for emergency rooms at nearly 120 CHS hospitals around the country, including ER facilities in Philadelphia, Las Vegas, Oklahoma City and elsewhere.

The global settlement resolves allegations in seven qui tam lawsuits brought in federal courts around the country, including one filed May 2011 in the U.S. District Court in Nashville: United States ex rel. Doghramji v. Community Health Systems Inc. Grant & Eisenhofer, along with law firms Cohen Millstein Sellers & Toll PLLC and Barrett, Johnston, Martin & Garrison LLC, represented three plaintiff-relators in the case, including Dr. James Doghramji, who served as an ER physician at Philadelphia's Chestnut Hill Hospital.

The lawsuits alleged that CHS engaged in a scheme to increase revenues by inappropriately increasing inpatient admissions to its hospitals from emergency room operations. Investigations revealed that the practice occurred in CHS hospitals in the following states: Tennessee, Alabama, Arizona, Arkansas, California, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, New Jersey, New Mexico, North Carolina, Oklahoma, Pennsylvania, South Carolina, Texas and Virginia.  Whistleblowers – who included a number of former CHS ER staffers in addition to Dr. Doghramji – claimed that their hospitals routinely admitted patients who should have been released following their ER visits, and for whom the government's Medicare and Medicaid programs never should have been billed. 

Among the allegations in the 165-page relators' complaint: "To service the high debt accumulated by an aggressive business strategy of leveraged acquisitions, CHS embarked on a scheme to increase inpatient admissions from its ERs absent any corresponding change in the medical needs of the patients... The necessary and intended result of CHS's wrongful conduct has been a massive number of false and/or fraudulent claims by CHS hospitals across the country…"

In addition to very specific allegations about hospital practices, the Doghramji complaint alleged a statistical analysis that pin-pointed inpatient admission anomalies at over 70 CHS hospitals across the nation.

"The allegations supporting this lawsuit tell the story of a large publicly traded for-profit hospital chain gobbling up local community hospitals and running them with an eye toward financing their acquisitions by a scheme to bill the government for unnecessary medical services," said Reuben Guttman, a director at Grant & Eisenhofer who heads its Washington, D.C.-based False Claims Litigation Group.  Traci Buschner, Senior Counsel at G&E, led the case for the firm.

Mr. Guttman noted the serious patient safety concerns raised by the claims of this case: "The scheme that these whistleblowers brought to light defrauded the Medicare system and compromised patient safety by unnecessarily hospitalizing individuals at CHS hospitals nationwide.  Legitimate patients in need of proper medical care and attention surely suffered as a result of CHS resources being directed to tend to individuals who were filling beds solely to run up steep charges for the parent company."

Dave Garrison, partner at Barrett, Johnston, Martin & Garrison, stated: "Because of these brave individuals, the federal government has reached a historic settlement that will help ensure the integrity of Medicare and demonstrate that no company is above the law." 

Grant & Eisenhofer is one of the nation's leading litigation firms, with a major track record representing whistleblowers in cases involving abuses in the health care and pharmaceutical industries.   In the last two years, its False Claims Litigation Group has had unprecedented success representing lead whistleblowers in the government's $1.6 billion settlement with Abbott (2012); its $1.04 billion settlement with GlaxoSmithKline (2012); its $257 million settlement with Pfizer (Wyeth) (2013); and its $24.9 million dollar settlement with Amgen (2013).

About Grant & Eisenhofer
Grant & Eisenhofer P.A. represents plaintiffs in a wide range of complex financial litigation. G&E's clients include institutional investors, whistleblowers and other stakeholders in bankruptcy litigation, securities class actions, derivative lawsuits, consumer class actions, antitrust suits, and cases involving the False Claims Act. G&E has recovered more than $13 billion for investors in the last five years and has consistently been cited by RiskMetrics for securing the highest average investor recovery in securities class actions. Grant & Eisenhofer has been named one of the country's top plaintiffs' law firms by The National Law Journal for the past ten years. For more information, visit http://www.gelaw.com/

Contact:
Allan Ripp 212-262-7477 [email protected]
Elise Martin 302-622-7004 [email protected]

SOURCE Grant & Eisenhofer

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