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Physicians Who Spoke Out Against Emergency Room Fraud Now Seek Damages due to Unlawful Terminations and Contract Interference

April 24, 2019

Charlotte, N.C. (April 24, 2019) – Mid-Atlantic Emergency Medical Associates (MEMA), an emergency medicine physician practice based in Charlotte, N.C., along with individual physicians Thomas L. Mason, M.D., and Steven G. Folstad, M.D., have filed an Amended Complaint in the U.S. District Court for the Western District of North Carolina alleging Health Management Associates, LLC (HMA) and its affiliates, now owned by Community Health Systems, Inc. (“CHS”), acted in concert with a national emergency physician staffing company, EmCare, Inc., and its affiliated entities, to defraud Medicare, Medicaid, other federally-funded healthcare programs, private healthcare insurers, and self-paying emergency room patients through medically unnecessary diagnostic tests and hospital admissions for the sole purpose of increasing HMA’s revenues.

When Dr. Mason, Dr. Folstad, and other MEMA physicians complained about and pushed back against these schemes, and took steps to stop HMA’s fraud, HMA retaliated by harassing and threatening MEMA and its emergency room physicians, ultimately terminating their contracts to staff the emergency rooms at CHS’ Lake Norman Regional Medical Center and Davis Regional Medical Center. EmCare, in order to benefit from a national preferred provider agreement with HMA, interfered with MEMA’s contracts – and was ultimately awarded an emergency room and hospitalist contract at Lake Norman Regional.

On September 23, 2010, Drs. Folstad and Mason first filed a sealed qui tam complaint in federal court in Charlotte, North Carolina alleging HMA and EmCare submitted or caused the submission of false claims to federal and state healthcare programs, in violation of the federal False Claims Act and analogous state false claims acts. Their case was later transferred to Washington, D.C., where a number of other cases against HMA and its affiliates were consolidated for investigation and resolution.

In December 2017, EmCare paid $33 million to the United States and named states to resolve the Government’s federal and state False Claim Act claims raised by the physicians’ allegations. In addition, on September 25, 2018, the United States Department of Justice and the United States Attorney’s Office for the Western District of North Carolina announced that the Government had reached a $262 million settlement with HMA and CHS to resolve HMA’s federal criminal, civil and administrative liability to the United States, the Department of Health and Human Services Office of Inspector General, the Department of Defense, and certain participating states. CHS paid $74.5 million of this settlement to resolve the federal False Claim Act allegations that HMA had engaged in a corporate-wide scheme related to emergency room fraud and $8.96 million of the settlement to resolve allegations that HMA had violated the Anti-Kickback Statute through its relationship with EmCare.

“By standing up for their patients’ safety and for what was right, these physicians were unlawfully terminated by HMA,” said Thomas D. Myrick, lead counsel and member of Moore & Van Allen, PLLC. “EmCare exploited their refusal to participate in this fraudulent scheme, they have suffered millions of dollars in damages, and it’s time for them to be made whole – not punished.”

“We are proud to be heading into our 9th year representing a courageous and highly-qualified group of North Carolina emergency room physicians,” said Marc Raspanti, one of the lead attorneys who first initiated the qui tam action.

“It has been a long haul for our clients, who first fought to protect their patients in the emergency room, and in HMA emergency rooms around the country, from HMA and EmCare’s corporate-driven fraud. They then assisted the Government in pursuing the defendants for committing healthcare fraud. It is now their turn, finally, to tell their personal story and to seek justice for the injuries they suffered when they pushed back against two giants in the healthcare industry,” stated Pamela Coyle Brecht, another of the lead attorneys in the qui tam case from the beginning.

“After 9 years, this litigation is now finally moving into the stage where our clients can recover the damages they sustained due to their wrongful termination, and they look forward to their day in court,” noted James F. Wyatt, III, also counsel for plaintiffs in the case.

“After 24 years of practicing emergency room medicine at the highest level, it saddens me that we needed to file a federal lawsuit with all the effort that it has taken to stop these fraudulent practices. It is my hope that our efforts over these many years will make a difference for emergency room patients all over the United States,” said Thomas L. Mason, M.D., FACEP.

“Our efforts should embolden other emergency medicine practitioners to stand up against corporate pressure to put profits before patient care. Perhaps others will not have to resort to taking the extraordinary measures that our group was forced to do to stop this type of illegal behavior,” said Steven G. Folstad, M.D., FACEP.

Plaintiffs are represented by:

Thomas D. Myrick, Paul Peralta, Emily Pera, and Ryan Grover of Moore & Van Allen PLLC (www.mvalaw.com) located in Charlotte, North Carolina;

James F. Wyatt, III of Wyatt & Blake, LLP (www.wyattandblakelaw.com) also in Charlotte, North Carolina; and

Marc S. Raspanti and Pamela Coyle Brecht of Pietragallo Gordon Alfano Bosick & Raspanti, LLP (www.pietragallo.com) located in Philadelphia, Pennsylvania.