North Carolina Physicians’ Whistleblower Lawsuit Leads to Second Multi-Million-Dollar Recovery in Ground-Breaking Emergency Room Fraud Case

CHARLOTTE, N.C.–(BUSINESS WIRE)–The United States Department of Justice and the United States Attorney’s Office for the Western District of North Carolina announced that HEALTH MANAGEMENT ASSOCIATES, INC. (“HMA”), now known as Health Management Associates, LLC, and its parent, will pay over $260 million to resolve false hospital billing and kickback allegations. This settlement includes civil payments by HMA of more than $74 million plus interest to the federal government and participating Medicaid states to settle six whistleblower lawsuits filed under federal and state False Claims Acts (FCAs) related to HMA’s emergency room fraud.

One of these cases, filed by Drs. Thomas Mason and Steven Folstad, and their emergency medicine practice, Mid-Atlantic Emergency Medical Associates, PA (“MEMA”)(“collectively, “the MEMA Relators”), alleges a nationwide scheme by HMA’s corporate, division, and hospital executives to defraud federal and state healthcare programs by submitting false claims related to patients treated in HMA’s emergency rooms. MEMA alleged that HMA’s fraud caused two types of false claims to be submitted. First, HMA caused patients to be admitted from their emergency room without regard for medical necessity. In other words, patients were hospitalized when they did not need to be. Second, when HMA did bill for outpatient emergency room care, they padded the charges by manipulating the acuity points used to justify their billing.

The MEMA Relators also allege that HMA and its affiliates acted in concert with a national emergency physician staffing company, Emergency Medical Services Corporation, Inc. (“EmCare”), and its affiliated entities, to defraud government healthcare programs and retaliate against MEMA for refusing to participate in the HMA and EmCare defendants’ emergency room fraud. The settlement includes false claims HMA submitted for both unnecessary admissions (false inpatient charges) and inflated patient acuity to support upcoded outpatient emergency room charges.

Drs. Mason and Folstad and MEMA have been represented for longer than eight years by Marc S. Raspanti, Pamela Coyle Brecht, and Michael A. Morse of the Pennsylvania law firm, Pietragallo Gordon Alfano Bosick & Raspanti, LLP. They pursued this case on behalf of the MEMA Relators and the American taxpayers with co-counsel, James F. Wyatt, III and Robert Blake of the Charlotte, North Carolina law firm Wyatt & Blake, LLP.

“After 24 years of practicing emergency room medicine at the highest level, it saddens me that we needed to file a federal lawsuit with all the effort that it has taken to stop these fraudulent practices. It is my hope that our efforts over these many years will make a difference for emergency room patients all over the United States,” said Thomas L. Mason, M.D., FACEP, Senior Member –Mid-Atlantic Emergency Medical Associates.

“Our efforts should embolden other emergency medicine practitioners to stand up against corporate pressure to put profits before patient care. Perhaps others will not have to resort to taking the extraordinary measures that our group was forced to do to stop this type of illegal behavior,” said Steven G. Folstad, M.D., FACEP, Senior Member, Mid-Atlantic Emergency Medical Associates.

Marc S. Raspanti, of Pietragallo Gordon Alfano Bosick & Raspanti, LLP, lead counsel said, “It has been a privilege to represent our clients through this long and stressful ordeal. They remain true healthcare professionals who chose to place their patients before corporate pressures. At the end of the day, only sick patients should be hospitalized. Billing for unnecessary hospital stays wastes precious government funds and endangers the viability of the Medicare Trust Fund.”

Pamela Coyle Brecht, a partner with Pietragallo Gordon Alfano Bosick & Raspanti, LLP, who has also represented the MEMA Relators since 2010, added, “As a result of the fortitude of Drs. Mason and Folstad and their practice, and their willingness to stand up for their patients against two national behemoths, unsuspecting emergency room patients are no longer subject to this fraud. The taxpayers – both federal and state – have recovered tens of millions of dollars through the MEMA Relators’ efforts.

“In recognition of the harsh reality that those who stand up against fraud often suffer retaliation and all of its related harm, the federal False Claims Act and the laws of North Carolina provide remedies for persons who, like the MEMA Relators, have been victimized by fraudsters,” said James F. Wyatt, III, the whistleblowers’ Charlotte-based counsel.

The lawsuit is captioned United States et. al. ex rel. Mason, Folstad and MEMA v. Health Management Associates, Inc., et. al., No. 3:10CV472 (W.D.N.C.). The matter is assigned to the Honorable Graham C. Mullen. The plaintiffs’ private causes of action, which are still pending against HMA and EmCare, will be remanded to the U.S. District Court for the Western District of North Carolina for litigation on the Whistleblowers’ private causes of action.

About Pietragallo Gordon Alfano Bosick & Raspanti LLP

Pietragallo Gordon Alfano Bosick & Raspanti, LLP, a litigation and business law firm with a national client base, is one of the largest and most experienced whistleblower law firms in the United States. Lawyers in its nationwide whistleblower practice have served for 30 years as lead counsel in qui tam cases that have recovered over $2 billion for federal and state taxpayers. In addition to its Pittsburgh and Philadelphia offices, the firm has offices in Sharon, Pennsylvania; Steubenville, Ohio; and Weirton, West Virginia. For more information, visit our website at www.PIETRAGALLO.com.