ANDERSON — Officials at Community Hospital Anderson are declining to comment on a federal complaint against Community Health Network.
The U.S. Justice Department alleges that Community Health Network paid physicians’ salaries well above market value and paid bonuses based on referrals for tests and procedures at facilities owned by Community.
Likewise, the U.S. Attorney’s office in Evansville, which is investigating the case, would not respond to questions from The Herald Bulletin about whether officials at Community Hospital Anderson and other Madison County area properties owned by Community Health Network would have been involved in or had knowledge of the alleged scheme.
Community operates multiple locations in Madison County including Community Hospital Anderson, Community Cancer Center Anderson, Community Health Pavilion and Community Clinical Research Center.
The complaint cites the Stark Law, which “prohibits the hospital from billing Medicare for services referred by a physician with whom the hospital has an improper financial relationship that does not meet any statutory or regulatory exception,” according to a Justice Department statement.
“Improper financial relationships between hospitals and physicians corrupt clinical decision-making, threaten patient care, and ultimately drive up Medicare costs,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division in a statement. “We are committed to eliminating these improper inducements and thereby ensuring the Medicare program remains fiscally sound to serve our nation’s senior citizens.”
The government declined to comment beyond their written statement.
Local officials declined to comment on the case instead deferring to Kris Kirschner, director of corporate communications.
“Community Health Network is committed to upholding the highest regulatory and ethical standards in all our business practices, including physician compensation,” said a statement released by Kirschner. “We have cooperated fully with the government’s requests leading up to this point, and we are disappointed with their decision. We believe that it is a waste of the government’s time and resources to pursue these meritless claims.”
The original whistleblower complaint was filed by Thomas Fischer under the False Claims Act which allows an individual to sue on behalf of the government for false claims and receive a share of any recovery.
Fischer was hired as Community’s CFO in 2005 and served concurrently as chief operating officer starting in 2012. He was fired in 2013 and filed his complaint in 2014 where it was sealed while the government conducted its investigation.
The government’s complaint says that at least since 2008 and particularly after the arrival of CEO Brian Mills the hospital embarked on a defensive campaign to hire physicians in order to prevent their referrals from going to competitors.
Medicare pays more for procedures done at a hospital instead of in a doctor’s office. The government’s case contends that CHN used those higher payments to finance the hiring of the physicians at rates significantly more than they were earning in private practice and above fair market value.
The government’s complaint cites several examples including Dr. James Callahan.
According to the complaint, CHN believed hiring Callahan would capture a third of neuro and spine cases in Madison, Grant, Tipton and Delaware counties.
In January 2012, CHN entered into a four-year agreement with Callahan to take effect in February 2013 with a guaranteed base salary of $921,600. That was based on 12,000 work Relative Value Units (wRVU), a productivity metric used by Medicare. But in March 2012 lowered his projected wRVU to 7,983.