Community Health Network, an Indiana-based hospital system, has agreed to pay $135 million to settle allegations of healthcare fraud under the False Claims Act (FCA).
The settlement marks the conclusion of a decade-long case initiated by Thomas P. Fischer, a former chief operating officer and chief financial officer of Community, who acted as a whistleblower.
Fischer's lawsuit alleged that Community violated federal and state laws, including the Stark Law and the Anti-Kickback Statute, by providing excessive compensation to employed physicians and above-market-value rents to a physician-owned real estate partnership. These payments were allegedly made to influence patient referrals to Community facilities.
The settlement follows a $345 million agreement reached last year for related claims and a $20.3 million settlement in 2015, bringing Community's total FCA-related payouts to over $500 million in the past decade.
“This historic settlement is a testament to the public-private partnership unique to the FCA,” said Veronica Nannis, Fischer’s attorney at Joseph Greenwald & Laake. “It shows the genius of the FCA — allowing the government to focus on some of the claims while the relator takes the laboring oar on the other claims.”
The $135 million resolution addressed claims pursued solely by Fischer after federal and state authorities declined to intervene in parts of the case. Fischer also resolved his employment-related claims against Community, stemming from his termination over a decade ago.
Fischer expressed gratitude to his legal team and government attorneys for their efforts, adding that he hopes the case inspires others to report potential fraud in the healthcare sector. "These settlements put money back into the healthcare system and are a victory for taxpayers," he said.
