Community Health Network to pay $345M via federal lawsuit

Dec. 19—INDIANAPOLIS — Community Health Network will pay a $345 million settlement to the federal government after allegations of a years-long Medicare fraud scheme.

The U.S. Department of Justice announced the settlement Tuesday.

Community Health Network includes Community Hospital Anderson and Community Health Pavilion in Anderson,

Around 2008, Community Health Network, allegedly, began paying some physicians as much as double what they were receiving via their private practices, according to the department of justice.

It is alleged that physicians were given bonuses based on their volume of referrals. Some of those referrals were then billed to Medicare in violation of the federal Stark Law, which prohibits hospitals from billing Medicare for referrals by physicians with whom they have a financial relationship, according to the DOJ statement.

Community Hospital Anderson officials did not respond to a request for a comment Tuesday. Instead, Kris Kirschner, Community Health Network's director of corporate communication, released a statement.

"This is completely unrelated to the quality and appropriateness of the care Community provided to patients," Kirschner wrote.

"Community has consistently prioritized the highest regulatory and ethical standards in all our business processes."

Kirschner said the settlement will not impact the network's day-to-day operations.

She said the $345 million will be paid using reserve funds. The network will also enter a 5-year Corporate Integrity Agreement with the federal government.

The government's findings stem from a 2014 complaint filed by Thomas Fischer, former chief operating and chief financial officer. He filed the complaint after he was fired in 2013.

Fischer is slated to get a share of the funds recovered. The exact amount has not been made public.

In a previous report, the complaint alleged that the network used excess funds taken from Medicare to hire Dr. James Callahan.

Network officials, reportedly, thought Callahan could bring CHN a third of the neuro and spine cases in Madison, Grant, Tipton and Delaware counties.

In January 2012, Callahan entered a 4-year agreement with CHN with a guaranteed base salary of $921,600.

Callahan remains employed by the network as of Tuesday. His current salary has not been reported.

The complaint alleged high salaries were part of the network's effort to keep referrals from competitors. It was also alleged that Medicare revenue was used to finance such efforts.

Follow Caleb Amick on Twitter @AmickCaleb. Contact him at caleb.amick@heraldbulletin.com or 765-648-4254.