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12/3/2017 7:46:00 PM
62 Hoosier hospitals embroiled in federal lawsuit

James Sprague, Connersville News-Examiner Editor

Henry County Memorial Hospital (now Henry Community Health,) along with hospital systems in Fayette, Rush and Franklin counties and across the state, currently find themselves embroiled in a federal lawsuit alleging hospital systems statewide falsified medical claims and defrauded taxpayers of millions of dollars.

According to federal court documents unsealed last week in the United States District Court, Northern District of Indiana, Fayette Regional Health System – along with Henry County Memorial Hospital (now Henry Community Health), Margaret Mary Community Hospital and Rush Memorial Hospital – finds itself among 62 hospital systems statewide that are defendants in the lawsuit, initially filed back in September 2016. 

The lawsuit, brought against the various hospitals by attorneys Michael Misch and Bradley Colborn of the South Bend law firm Anderson, Agostino & Keller on behalf of the federal and state government, alleges the hospital systems violated the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, which was instituted into federal law in 2009.

The law created a program known as the Electronic Health Records Incentive Program, overseen by the U.S. Department of Health and Human Services, which allowed for hospital systems to receive incentives and grant funding for the adoption and acceleration of electronic health records by those hospital systems.

Hospital systems, through the enactment of the law, were given between 2010 and 2013 to show “meaningful use” of electronic health records, and to meet 14 compliance requirements, in order to be eligible for the grant funding.

Among those compliance requirements, according to the lawsuit, was promptly providing patients with their electronic medical records within three business days of a request for them, in addition to reporting to the Department of Health and Human Services how many requests were made for electronic medical records, and the number of times the hospital system met that three business day requirement for providing those records.

Those hospital systems not achieving at least a 50 percent success rate, regarding that requirement, would be ineligible for the grant funding.

Misch and Colburn, according to court documents, regularly handled personal injury and medical malpractice cases, which required them to often make requests of hospital systems for electronic medical records, and the duo found themselves facing expensive delays in receiving such records from four initial Indiana hospitals – Memorial Hospital in South Bend, St. Joseph Regional Medical Centers in Plymouth and Mishawaka, and St. Vincent Hospital – prompting them to investigate further.

That investigation, per court documents, allegedly revealed that many hospital systems throughout the state – despite reporting to the federal government that they were compliant in their records request requirements, the stipulation in receiving grant dollars – were not compliant, and in turn “defrauding the American public by falsely recording or reporting their compliance” in order to receive such grant dollars.

This allegation was based in part on a statistical analysis by the lawyers, per court documents, that showed low numbers of requests for medical records from the other defendant hospital systems named in the suit – such as Fayette Regional Health System – did not correlate with the higher numbers of requests for medical records from some other Indiana and nationwide hospital systems, suggesting that the defendant hospital systems had “aberrantly reported receiving zero requests (claiming to be exempt), or otherwise provided reporting numbers in the single or lower digits that just happened to hit the 50 percent mark needed to get millions in grant funding.”

Henry County Memorial Hospital, for instance, reported no requests for 2012 and compliant with two out of two requests in 2013; Rush Memorial Hospital reported no requests at all for both 2012 and 2013; Fayette Regional Health System reported no requests for 2012 and compliance with one of one request in 2013; and Margaret Mary Community Hospital reported no requests at all in 2012 and 2013 for electronic medical records, per the lawsuit.

The lawsuit goes on to list that the defendant hospital systems – between 2010 and 2013 – were paid a total of $228,231,431.05 in grant funding through the Medicare portion of the program, and another $96,154,738.27 through the Medicaid portion of the program, which the suit states was “public funding from the citizens of the united States in return for the promise that patients would be provided with fast, cheap, easy access to their electronic health records, and these hospitals have failed to keep that promise.”

The lawsuit claims the hospital systems violated the federal False Claims Act, in addition to the federal Anti-Kickback Statute due to the hospital systems allegedly allow their Release of Information providers – third-party companies the hospital systems contract with, to handle their electronic medical records requests – to “additionally profit by knowingly over-billing for the production of those medical records by seeking hundreds of dollars rather than the reasonable remuneration allowed under the HITECH Act.”

The lawsuit seeks damages of “three times the actual damage amount suffered by the United States for all funding issued to the Defendants under the EHR program” – potentially over $1 billion dollars – along with civil penalties against the defendant hospital systems.

The case is ongoing.

Related Stories:
• 62 Indiana hospitals accused of false claims, kickbacks

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