Community Health Network paid $135 million to settle allegations it overpaid physicians to gain patient referrals.
The suit stems from a 2014 complaint filed by Thomas Fischer, former chief financial officer and chief operating officer at Community Health Network, in the U.S. District Court for the Southern District of Indiana. Fischer alleged the health system violated the federal False Claims Act and the Stark Law, which prohibits hospitals from billing for services referred by physicians with whom they have financial relationships.
Related: Feds accuse Indiana hospital system of violating Stark Law
The suit alleged Community Health Network paid excessive salaries to physicians it was integrating into the health system to ensure downstream referrals, and then wrongfully terminated Fischer when he questioned the system's practices more than a decade ago.
A Community Health Network spokesperson said there was no wrongdoing found and the legal issues did not impact care quality. The Indianapolis-based health system agreed to the settlement "to avoid continued expenses and risks associated with continued litigation," according to its third-quarter financial earnings report.
“Throughout this process, we have consistently adhered to the highest regulatory and ethical standards in all aspects of our business," the spokesperson said.
Community Health Network, which operates roughly 200 care sites, has paid nearly $500 million to resolve the allegations brought by Fischer.
The Justice Department intervened in some parts of the case in 2020 and announced a $345 million settlement with Community Health Network in December 2023. The health system also entered into a five-year corporate integrity agreement with the Health and Human Services Department inspector general.
Fischer continued to pursue other issues, including the system's partnerships for orthopedic, OB-GYN and oncology services, and reached the $135 million settlement in late December.
Fischer was awarded an undisclosed amount as part of the settlement. Community Health Network's third-quarter financial report references a $6.3 million payment coming in January for an "employment-related settlement," which is likely tied to Fischer's claims of wrongful termination. An attorney representing Fischer declined to confirm the amount.
“This has been a long journey — more than ten years and thousands of hours of work," Fischer said in a Thursday news release. "I hope these settlements will help empower and inspire others working in healthcare organizations across the country to speak up and speak out if and when they see potential fraud."
