State, Former Employee of Walton Regional Allege Kickback Scheme

The state of Georgia joined has joined a lawsuit by a former employee of Walton Regional Medical Center in Monroe, now Clearview Regional Medical Center, alleging that the company was involved in a kickback scheme that cost Georgia taxpayers tens of thousands of dollars. 

The lawsuit claims that the hospital is one of several that paid kickbacks to a low-cost clinic to refer emergency patients, including undocumented, pregnant women, in order for it to file Medicaid claims with the state. It alleges that kickback payments were made to the clinic under the guise of interpretor services.

According to a statement from Georgia Attorney General Sam Olens, the whistleblower lawsuit is against Health Management Associates, Inc. (HMA, Inc.); HMA Monroe, LLC; Tenet Healthcare Corporation and its subsidiaries Atlanta Medical Center, North Fulton Hospital, Sylvan Grove Hospital and Spalding Regional Medical Center; and Clinica de la Mama (Clinica). 

The lawsuit, filed initially by Ralph (Bill) Williams, a former Chief Financial Officer at Walton Regional, alleges that after being hired as CFO, Williams came across HMA Monroe’s contract with Clinica, but could not identify any services that had been provided. When Williams questioned the contract, he learned that it was actually for the referral of emergency Medicaid patients.

“These hospitals allegedly paid Clinica kickbacks camouflaged as interpreter service payments to funnel emergency Medicaid patients their way and increase their bottom line,” Olens said in a statement. “As Attorney General, I take seriously my responsibility to protect the integrity of Georgia Medicaid and to ensure that those who defraud the program are held accountable.” 

HMA denies the allegations and has pledged to fight the complaint.

“The Company denies the allegations contained in the complaint, which the federal government declined to intervene in, and intends to vigorously defend itself,” HMA said in a statement released to Patch.

Tenet also released a statement in support of its hospitals named in the suit, saying it believed that the agreements were appropriate and provided substantial benefit to women in underserved Hispanic communities.

“The services provided under these agreements included translation, determination of Medicaid eligibility, and other services designed to improve the delivery of obstetric care and increase the likelihood of a safe birth and a healthy baby," the statement read.

According to the lawsuit, beginning as early as 2000, the defendant hospitals entered into written contracts with Clinca for translation and other services. The suit alleges that in reality, the true aim of the Clinica agreements was to achieve increased Medicaid patient referrals by using Clinica to recruit emergency Medicaid patients and steer them to the hospitals. The hospitals would then bill Georgia Medicaid for the associated services. 

The 61-page complaint is seeking damages and civil penalties on behalf of the state, citing violations of the federal Anti-Kickback Statute, the Georgia Medicaid False Claims Act, and the Georgia Medical Assistance Act. It claims the contract was in reality a conspiracy to fraudulently bill Georgia Medicaid for tens of thousands of ineligible Medicaid claims.

The complaint seeks damages and civil penalties on behalf of the State of Georgia. It alleges that the defendants violated the federal Anti-Kickback Statute and conspired to fraudulently bill Georgia Medicaid for tens of thousands of ineligible Medicaid claims.

The federal Anti-Kickback Statute expressly prohibits hospitals from paying any person or entity to recruit patients for any federal or state healthcare program, which includes Georgia Medicaid. The complaint claims that the hospitals made numerous false statements, testifying that they did not violate the Anti-Kickback Statute. 

According to the lawsuit, Williams was terminated from Walton Regional Medical Center "without providing any reason" in 2009, not long after Williams had gone to his immediate boss, CEO Gary Lang, with questions about the practices.  The complaint claims that a "final invoice" for interpreter services was billed by the clinic just prior to Williams termination. 

Lang left Walton Regional in March 2010 and was replaced by JT Barnhart. James Machado recently took over as CEO of the new Clearview Regional Medical Center in Monroe.

The AGs office said the lawsuit was filed in the United State District Court for the Middle District of Georgia in Athens, Ga.