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Lutheran parent to pay $98 million to settle billing claims

No finding of improper conduct, company says

FRANKLIN, Tenn. – Community Health Systems Inc. has agreed to pay $98 million to settle federal claims of improper billing by the hospital company.

The Justice Department and Community Health, the parent of Lutheran Hospital in Fort Wayne, announced the settlement Monday.

The government alleges that the company admitted patients to the hospital when it wasn’t medically necessary and then billed Medicare, Medicaid and the military’s Tricare program for those inpatient services.

Community Health should have billed for less costly outpatient or observation cases, the government said.

Franklin, Tennessee-based Community Health said there is no finding of improper conduct under the settlement and denied any wrongdoing.

Community Health said it previously set aside $102 million to cover the settlement and its related legal costs.

The settlement includes $9 million for similar alleged violations at Laredo Medical Center in Texas. It also cited improper billing of Medicare for services referred to the hospital by a doctor who was offered a director’s position there.

The government said that from 2005 through 2010, Community Health “engaged in a deliberate corporate-driven scheme” to boost hospital admissions of patients older than 65 covered by Medicare, Medicaid and the Tricare program who came into emergency rooms.

The settlement also resolved so-called “qui tam” lawsuits filed by several individuals under the False Claims Act, which allows private citizens to sue on the government’s behalf and to receive a portion of the money recovered from companies. The individuals who filed suits included physicians, nurses and supervisors at several Community Health hospitals.

Community Health shares closed Monday up 45 cents, to $47.69. They were up 86 cents, or 1.8 percent, to $48.55 in after-hours trading.

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