Late News: Justice Dept. joins whistle-blower suit against Community Health

The U.S. Justice Department joined a whistle-blower lawsuit against Community Health Systems alleging three of its New Mexico hospitals violated the False Claims Act when they received federal matching funds through two state Medicaid programs that subsidize indigent care. Wayne Smith, chairman, president and chief executive officer of the Franklin, Tenn.-based hospital chain, told investors during an earnings call Feb. 20 that the government was likely to take action on the matter. The same day, the Justice Department filed a notice of intervention in U.S. District Court in Albuquerque, and the judge unsealed the case March 5. The Justice Department has yet to file its own version of the complaint. The allegations originated in a whistle-blower lawsuit filed in 2005 by Robert Baker, identified in a department news release as a former revenue manager in Community’s corporate office, and involve 162-bed Eastern New Mexico Medical Center in Roswell, 49-bed Mimbres Memorial Hospital in Deming and 42-bed Alta Vista Regional Hospital in Las Vegas. Baker and the government allege the hospitals improperly made donations to New Mexico counties knowing their money would be tripled, partly by drawing federal dollars, and returned to them from the state. Community spokeswoman Tomi Galin said in a statement that “the company views this issue as a funding dispute between government agencies” and “intends to vigorously defend itself.”