August 04, 2014

(WASHINGTON, D.C.)  Community Health Systems, Inc. (CHS) has agreed to pay $98 million to resolve allegations that it overbilled the federal Medicare and Medicaid systems by unnecessarily admitting patients to more than 100 of its hospitals across the country.  The settlement was announced today by the U.S. Department of Justice.

Cohen Milstein Sellers & Toll PLLC, along with co-counsel Grant & Eisenhofer and Barrett, Johnson, Martin & Garrison, represented plaintiff-relators Dr. James Doghramji and Sheree Cook in their False Claims Act lawsuit against CHS, one of seven lawsuits resolved by today’s settlement.  Dr. Doghramji has served as an emergency room physician at Philadelphia’s Chestnut Hill Hospital and Cook worked as a nurse at Heritage Medical Center in Shelbyville, Tenn.  In May 2011, they filed United States ex rel. Doghramji v. Community Health Systems Inc. in the U.S. District Court in Nashville, Tenn.  The complaint alleged that CHS routinely admitted patients whose conditions were not severe enough to justify admission, and then billed Medicare and Medicaid for those admissions. 

In addition to specific allegations about CHS’ admission practices, Dr. Doghramji and Cook also provided a comprehensive statistical analysis showing admission rates that were significantly higher than expected at more than 70 CHS hospitals nationwide.

“CHS unnecessarily hospitalized patients so that it could make more money through larger Medicare and Medicaid reimbursements.  This settlement sends an important message that jeopardizing patient safety in order to increase profits will not be tolerated,” said plaintiffs’ counsel David Young, who along with attorney Kit Pierson led the case for Cohen Milstein.

The False Claims Act is a federal law that imposes a liability on persons and companies who attempt to defraud government programs. Typically, this activity comes to light and a lawsuit is initiated through whistleblowers who are allowed to file actions against these parties on behalf of the government. Those filing under the Act stand to receive a portion of any recovered damages.  Cohen Milstein’s Whistleblower/False Claims Act Practice Group has decades of combined experience successfully pursuing whistleblower cases under federal and state law in industries that transact business with the government, such as health care, pharmaceuticals, banking, defense, and importing. The practice group also has extensive experience in addressing the employment-related issues that commonly arise in whistleblower cases.


Pam Avery