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Community Health to pay $89M to settle Justice Department billing probe


(Reuters) — U.S. hospital operator Community Health Systems Inc. said it has agreed to pay more than $89 million to settle a government investigation over billing practices at 119 of its facilities.

The U.S. Department of Justice since 2011 had been investigating whether Community hospitals charged government health plans, such at Medicare and Medicaid, for expensive short-stay admissions via emergency rooms that should have been billed as outpatient or observation cases. The probe covered the period from January 2005 to December 2010.

Under terms of the settlement, Community agreed to pay $88.26 million to resolve the federal share of the claims and an additional $892,500 to states for their portion of Medicaid claims, the company said Monday.

The settlement involves no finding of improper conduct by Community Health Systems or its affiliated hospitals, and the company has denied any wrongdoing, it said.

Community had previously set aside a $102 million reserve fund to cover the settlements and related legal costs.

Community said it agreed to enter a five-year Corporate Integrity Agreement that will be incorporated into its existing compliance program.

The settlement does not cover government investigations into hospitals formerly affiliated with Health Management Associates that began before Community acquired HMA in January.