Community Health Systems Inc. has agreed to pay $260 million to settle fraudulent-billing allegations at Health Management Associates, which Community Health acquired in 2014, after the alleged misconduct occurred, the U.S. Department of Justice said late Tuesday.
The settlement includes $55 million related to two former Health Management Associates hospitals in Lancaster County, Lancaster Regional Medical Center and Heart of Lancaster Medical Center, which Community Health has since sold.
The alleged fraud in Lancaster involved the payment of kickbacks to doctors in return for patient referrals between 2009 and 2012.
"In one instance, HMA bought two businesses from a physician group for grossly inflated amounts. HMA also paid that same physician group under a contract that was styled as payment for services that were never performed or that neither party ever had any intention of performing," the U.S. Attorney's Office for the Eastern District of Pennsylvania said.
Community Health last year sold the Lancaster hospitals to Harrisburg's Pinnacle Health, which was subsequently acquired by UPMC.