WASHINGTON - Sixteen hospitals will pay USD$15.69 million (S$20.8 million) to resolve allegations they were reimbursed from Medicare for services that were unnecessary, the US Justice Department said on Thursday.
As part of the settlement, Health Management Associates Inc and 14 of its formerly associated hospitals will pay USD$15 million, Community Health Systems and its subsidiary Wesley Medical Center in Mississippi will pay USD$210,000, and North Texas Medical Center will pay USD$480,000, the Justice Department said.
Tennessee-based Community Health Systems bought smaller rival Health Management Associates Inc for USD$3.9 billion in 2014.
Through its affiliates, it owns, operates or leases 199 hospitals in 29 states.
The companies, which did not admit liability under the terms of the agreement, did not immediately respond to requests for comment.
They are alleged between 2005 and 2013 to have billed for mental health treatments that they knew did not meet the standard for Medicare reimbursement, including providing substandard therapy, the department said.
"Hospitals that participate in the Medicare programme must ensure that the services they provide and bill for are based on the medical needs of patients rather than the desire to maximise profits," said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department's civil division.