Pregnant immigrants at heart of scheme
In 2009, a whistle-blower filed a sealed lawsuit alleging that hospitals took part in a massive patient-buying scheme and unnecessary admissions. Georgia and the U.S. Justice Department later joined the suit, which became public. Now, federal prosecutors are pursuing a separate criminal case.
These are the allegations in the criminal investigation:
- Companies recruited pregnant, undocumented Hispanic women to their prenatal clinics across metro Atlanta and in Hilton Head, S.C.
- Under the guise of obtaining Spanish interpreter or other services, hospitals paid the clinics to refer the women for delivering their babies. Paying for patient referrals is considered an illegal kickback under federal and Georgia laws.
- The hospitals profited by billing Medicaid, which covers child birth for undocumented immigrants as an emergency medical condition. The hospitals also received millions of dollars of extra funding for indigent care based on the number of Medicaid patients the hospitals obtained.
A whistle-blower’s allegations that four Georgia hospitals — including Atlanta Medical Center — paid kickbacks to attract pregnant Medicaid patients have developed into a criminal case.
Two executives alleged to be involved in the scheme are scheduled to enter pleas on criminal charges this week before a federal judge in Atlanta.
That’s the first official indication that the federal government is seeking criminal charges in the case that involves two of the nation’s largest for-profit hospital chains.
The whistle-blower’s allegations are already the subject of a civil lawsuit against the hospitals. After conducting their own investigations, both the state of Georgia and the federal government joined the civil case. The hospitals could face hundreds of millions of dollars in penalties if it is successful.
The criminal case that is expected to unfold in Atlanta Wednesday and Thursday is separate from the civil case.
The executives scheduled to enter pleas on conspiracy charges are Gary W. Lang, a former chief executive officer of Walton Regional in Monroe, now Clearview Regional Medical Center, and Tracey Cota, a former top executive at two companies that ran prenatal clinics that primarily served undocumented pregnant Hispanic women.
Federal prosecutors have accused Lang and Cota of agreeing to a scheme in which the hospital would pay the clinics for referring patients for the delivery of their babies. The federal Anti-Kickback Statute prohibits payments in exchange for sending patients for care that is covered by a government health plan.
Federal prosecutors and the attorneys representing Lang and Cota declined to be interviewed.
Marlan Wilbanks, the Atlanta attorney representing whistle-blower Ralph D. “Bill” Williams, said the criminal charges and expected pleas will offer the latest confirmation of the accuracy of the fraud scheme that his client described.
Wilbanks said that if the executives cooperate with the investigation, they could detail exactly how the players put together the scheme that the whistle-blower discovered.
“You have a very unique situation here where two key insiders who were partners with the hospitals in the illegal conspiracies are helping to pull back the curtain and allow the government to see what the real deal was,” Wilbanks said.
Both Cota and Lang waived indictment. The scheduled pleas suggest that the former executives may be cooperating with the government’s investigation. Lang’s attorney, Michael Trost, declined to comment on whether his client is cooperating.
The cases grew out of what Williams observed after he was hired to work as chief financial officer at the hospital in Monroe.
In 2009, Williams found an agreement between the hospital and clinics that offered prenatal services to undocumented immigrants. Although the agreements outlined services that the clinics were supposed to provide, Williams says he determined that the agreements were simply a way to pay kickbacks to the clinics in return for arranging for the patients to go to the Monroe hospital for delivery of their babies.
While undocumented immigrants do not quality for regular Medicaid, they can qualify for emergency labor and delivery services through Medicaid if they meet the program’s financial requirements. The program will also pay for medical services for the newborns.
The accusations involve prenatal clinics — most doing business as “Clinica de la Mama” — that operated for years in various locations across metro Atlanta, from Lovejoy to Cumming.
The civil whistle-blower lawsuit that the state of Georgia and the federal government joined alleges that five hospitals — four in Georgia and one in South Carolina — had kickback agreements with the prenatal clinics. The Georgia hospitals include three owned by the massive Tenet chain: Atlanta Medical Center, North Fulton Hospital and Spalding Regional Medical Center. A Hilton Head, S.C., hospital owned by Tenet is also accused.
The fourth Georgia hospital, Clearview Regional, is now owned by Tennessee-based Community Health Systems, but was owned by Florida-based Health Management Associates when Williams worked worked there.
Community Health Systems declined to be interview. Tenet did not respond to requests for comment.
Tenet Healthcare has faced allegations of improper billing in the past. In 2012, Tenet agreed to pay $42.7 million to settle a Medicare overbilling case involving the False Claims Act. In 2006, it agreed to pay more than $900 million over four years to settle another federal case involving improper billing.
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