By DAVID BORAKS
Lake Norman Regional Medical Center in Mooresville and Davis Regional Medical Center in Statesville are facing a whistleblower lawsuit by two former emergency room doctors who say they were terminated for not ordering unnecessary tests and unnecessary hospital admissions.
Drs. Thomas Mason and Steven Folstad say in a lawsuit filed at U.S. District Court in Charlotte that they were pressured to boost revenues for parent company Health Management Associates.
Mason and Folstad and their company Mid-Atlantic Emergency Medical Associates (MEMA) originally filed the suit under seal in 2010. The suit recently became public when the U.S. Justice Department got involved It’s one of a series of similar suits around the country against Naples, FL-based HMA.
The suit also names Emergency Medical Services Corp. of Dallas, which replaced Mid-Atlantic EMA in 2010. The suit alleges that the billing and management practices at HMA and EMSC violated federal False Claims and Anti-Kickback laws.
Charlotte-based MEMA provided emergency room services under contract to the two Iredell County hospitals until summer 2010. (The company also has contracts with Presbyterian/Novant hospitals in Huntersville, Charlotte and Matthews.)
Among other things, the doctors allege that hospital guidelines and an electronic system called Pro-Med required emergency room physicians to order what they called “blatantly fraudulent and medically unnecessary ER tests.” They said the tests were part of a strategy by the hospital company to increase revenues.
The doctors say that HMA offered cash incentives to emergency room physicians and practices for adhering to policies and “benchmarks” for unnecessary tests and admissions.
In 2010, the doctors allege in their suit, “HMA terminated MEMA’s contracts without cause and as a direct result of MEMA’s repeated refusal to participate in HMA’s fraud and abuse practices.”
HMA has acknowledged in the past that its billing practices have been under investigation. On Dec. 16, the company issued a statement acknowledging lawsuits similar to the North Carolina case that had been filed, and newly unsealed, in Georgia and Florida. It also said it expected more cases to be unsealed, which ultimately included the North Carolina suit.
In its Dec. 16 statement, HMA said it “intends to contest the allegations in these matters, including by seeking dismissal of these complaints for, among other things, failure to state a claim or plead with the requisite factual particularity.”
The company said, “We closely monitor our billing practices, health care practices and compliance programs to maintain compliance with prevailing industry interpretations of applicable laws and regulations and make changes from time to time, as necessary.”
HMA warned investors in the statement that lawsuits like these can lead to “material fines, penalties, damages payments or other sanctions, including exclusion from participation in government health care programs.” It also could face liability for legal fees.
Separate investigations of the allegations are underway by the Justice Department, the U.S. Attorney’s Office for the Western District of North Carolina, the U.S. Department of Health & Human Services Office of the Inspector General, and the FBI.
The lead lawyer in the case, Marc S. Raspanti, said in a press release Friday: “This is a massive, nationwide fraud on the American taxpayers, that subjected patients to unnecessary tests and hospital admissions. “Dr. Mason, Dr. Folstad, and MEMA have exhibited tremendous personal and professional courage in repeatedly standing up to HMA’s improper pressures.”
Raspanti works with the Philadelphia law firm of Pietragallo Gordon Alfano Bosick & Raspanti.
The doctors’ legal team also includes James Wyatt of Davidson, and the Charlotte firm Wyatt & Blake.
Jan. 2, 2014, Charlotte Observer, “Doctors allege for-profit owner of two local hospitals committed Medicare fraud and offered kickbacks” – The Observer’s Karen Garloch has an extended report on the case, and its links to other cases around the country.