Health Management Associates, Inc. (NYSE:HMA) faces accusations by over 100 current and former employees. According to CBS News, they are accusing the health care giant of pressuring doctors at its 70 hospitals throughout the country to admit patients, whether they needed it or not, so that it could boost profits.
CBS’s news program “60 Minutes” began investigating the health care giant more than a year ago. Sunday night on the program several current and former employees of Health Management Associates, Inc. (NYSE:HMA) said the company used software and set targets for admissions which pressured doctors at its hospitals to admit more patients. They said any doctors who didn’t meet their pre-set quotas for the number of admissions were threatened with termination.
Health Management Associates, Inc. (NYSE:HMA) senior vice president Alan Levine, who’s in charge of the company’s Florida Group, said those allegations are incorrect. He told CBS that they don’t set quotas for hospital admissions, or put patients in the hospital if they don’t need to be. He also pointed out that Fortune magazine and other organizations recognize their hospitals as some of the nation’s top performers.
CBS correspondent Steve Croft showed Levine a performance review for a physician at an HMA hospital in Oklahoma, which listed a 20 percent admission goal. Levine denied ever seeing a document like it and said that it didn’t come from his company. CBS said it examined thousands of documents in the course of its investigation into HMA admission practices.
According to Cliff Cloonan, a former Health Management Associates, Inc. (NYSE:HMA) employee, his department chief told him that they should admit 20 percent of their patients, or “somebody’s going to get fired.” He also said that for patients 65 and over, possibly because they are on Medicare, the admission goal was 50 percent.
CBS also interviewed Paul Meyer, HMA’s former compliance director. He spent 30 decades at the FBI supervising Medicare fraud in Miami. He raised a red flag on HMA’s admission practices years ago and claimed that the company billed Medicare and Medicaid for hospital stays that were unnecessary. Meyer has filed a lawsuit against HMA for wrongful termination.
Currently, the U.S. Justice Department is also investigating HMA, specifically its emergency room management and its use of Pro-Med, a computer software brand.
Today, shares of Health Management Associates, Inc. (NYSE:HMA) are trading lower on the news of the investigation, dropping at least 6 percent since the markets opened. As of market’s close on Friday, the stock has increased almost 8 percent this year.